German prosecutors investigate Rhoen takeover attempt

FRANKFURT Fri Aug 30, 2013 10:26am EDT

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FRANKFURT Aug 30 (Reuters) - Munich prosecutors are investigating a case of suspected market manipulation related to last year's failed attempt to take over German hospitals chain Rhoen-Klinikum by rival Fresenius.

"There is an investigation based on accusations of market manipulation and attempted coercion," Munich head prosecutor Thomas Steinkraus-Koch said on Friday.

He added that the criminal investigation, launched in early July, was linked to the purchase of a stake in Rhoen by unlisted rival Asklepios, which took place after diversified healthcare group Fresenius made its offer for Rhoen.

Several people are under investigation, Steinkraus-Koch said, declining to name them.

Rhoen's bylaws required Fresenius to seek 90 percent shareholder approval for its bid and the purchase of a stake of less than 10 percent in Rhoen by Asklepios was enough to prevent Fresenius from clearing that hurdle.

Fresenius later abandoned a plan to launch a bid based on a lower acceptance threshold, which would not have given it full control over the target.

Asklepios opposed the Rhoen-Fresenius combination because it feared the emergence of a dominant player able to trump rivals when public-sector hospitals are put up for auction.

Asklepios, owned by founder Bernard Broermann, was not the only investor hostile to the Rhoen-Fresenius tie-up. The owner of B. Braun, which competes with Fresenius in medical equipment such as infusion and tube feeding supplies, bought a 5 percent stake in Rhoen last year.

Sources have said B. Braun feared the deal would have put it at risk of losing client Rhoen to Fresenius's medical equipment arm.

A spokesman for Eugen Muench, Rhoen's founder and supervisory board chairman, said Muench was not under investigation, declining to comment further.

A Rhoen spokesman said he was not aware of the company being subject to a probe. A spokeswoman for B. Braun declined to comment, while officials at Fresenius and Asklepios were not immediately available for comment. (Editing by David Holmes)

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