By Jonathan Gould and Ludwig Burger
FRANKFURT (Reuters) - Germany's Rhoen-Klinikum is to sell most of its hospitals to rival Fresenius SE for 3.07 billion euros ($4.1 billion), in an attempt by Rhoen's founder to outflank opponents to an outright sale of the company.
The deal follows a long struggle by Rhoen-Klinikum's founder Eugen Muench to sell the business to Fresenius in the face of opposition from rebel shareholders, an industry rival and a supplier.
The 43 hospitals and 15 outpatient facilities being sold account for about two thirds of Rhoen's revenues, with mainly specialized clinics and university teaching hospitals remaining with Rhoen.
Rhoen and Fresenius have wanted to create a country-wide network of hospitals large enough to provide a form of medical insurance.
The transaction, which according to Rhoen does not require a shareholder vote, would make Fresenius unit Helios the largest private hospital operator in Europe, Fresenius said in a statement.
The hospital deal comes a year after Fresenius dropped an initial 3.1 billion euro plan to take over Rhoen.
Shares in Rhoen jumped 9.9 percent at the open, while those of Fresenius were up 5.2 percent.
Rhoen founder and chairman Muench last year initiated the sale of the entire group, in which he and his wife hold 12.5 percent, to diversified healthcare company Fresenius.
But rival hospitals operator Asklepios and a medical supplies maker B. Braun weighed in with the purchase of enough shares to fend off the suitor.
Muench, who has continued to campaign for a sale, and he and his detractors have engaged each other in legal action.
Sources have said B. Braun saw the deal as putting it at risk of losing Rhoen as a client to Fresenius while Asklepios feared that a dominant player would be able trump rivals when public-sector hospitals were put up for auction.
B. Braun and Asklepios declined to comment on Friday.
The acquisition would boost Helios' sales by about 2 billion euros and earnings before interest, tax, depreciation and amortization (EBITDA) by about 250 million, Fresenius said.
Helios would have 117 hospitals across Germany and sales of nearly 5.5 billion euros after integration of the Rhoen facilities.
Fresenius said the purchase price would be entirely debt financed and it would not assume any of Rhoen's debt.
The ratio of the Fresenius group's net debt to core earnings would temporarily rise above 3.0 this year but remain below 3.5 before returning to the 2.5-3.0 target range next year, the company added.
Rhoen said in a separate statement that it planned to pay a special dividend of up to 1.9 billion euros, funded by transaction proceeds and reserves, on top of its regular dividend. It was also mulling buying back its own shares.
Proceeds also would be used to repay debt, with a further 200 million euros slated for investments, it said.
After the sale, Rhoen would still control several hospitals, including university hospitals in the cities of Giessen and Marburg, and have revenue of about 1 billion euros, it said.
The deal requires approval by antitrust authorities as well as minority shareholders in some of the hospitals concerned.
(Editing by Stephen Coates and Jane Merriman)