Cleopatra Hospital Company (CLHO.CA) announced that its BoD will seek regulatory approval for a mandatory tender offer to acquire 47.283% of Cairo Specialised Hospital (CSH) for EGP140.4mn (at an offer price of EGP110/share), implying a total value of EGP297mn for CSH. The offer price puts CSH at EV/EBITDA of 8-9x (based on our estimate for annualised 9M16 EBITDA) and P/E of c14x (based on annualised 9M16 net profit). CSH is the largest among Cleopatra’s four hospitals (200 beds, 17 clinics) and has room for improvement in operating efficiency and upward adjustment in service prices; Cleopatra allocated c50% of its 2016-17 restructuring capex plan to CSH. A few weeks ago, CSH inaugurated a EGP22mn radiology centre, which management believes will also help the hospital become a cardiac care centre of excellence. It is worth noting that In July 2014 Cleopatra acquired 52.7% of CSH at a total value of EGP107mn, implying an estimated transaction value/EBITDA of 7x. We estimate the acquisition of NBH (Oct 15) and Al Shourouk (Feb 16) were made at transaction value/EBITDA of 9-10x. Please note that EFG Hermes Investment Banking is advising on the mandatory tender offer, while Zuficar & Partners is serving as legal counsel. (Wafaa Baddour, CFA, company) Cleopatra Hospital (CHC): EGP13.22 as of 14 Dec, Rating: Buy, TP: EGP11.70/share, MCap: USD142mn, CLHO EY / CLHO.CA