Rhoen-Klinikum Investor Favors Share Buyback

Proceeds from the sale of most of Rhoen-Klinikum AG's (RHK.XE) clinics should be used to cut debt and buy back shares, large investor Eugen Muench said in an interview with the Sueddeutsche Zeitung published Monday.

"As the anchor shareholder, I'm strictly against paying out a special dividend," after the sale, Mr. Muench said, noting a buyback is better for smaller shareholders, who would otherwise have to pay a chunk of any dividend to the tax office.

In September, Rhoen-Klinikum said it would sell the bulk of its hospitals to health care company Fresenius SE & Co KGaA (FRE.XE) for 3.1 billion euros ($4.19 billion).

Mr. Muench said EUR800 million of the proceeds should be used to relieve debt, EUR400 million should be earmarked for investment, and the remaining EUR1.9 billion could be used to buy back around 50% of the company's share capital.

"Investors who want to sell could reckon with an offer of around EUR28 per share, which would be an attractive price," Mr. Muench is quoted as saying. Rhoen-Klinikum shares closed Friday at EUR20.25.

He also emphasized that he and his wife intend to remain the company's largest single shareholder.

"My wife and I won't sell, not a single share. We want to keep the money in the company," Mr. Muench added.

-Write to the Frankfurt Bureau at [e-mail]

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