UPDATE 1-Rhoen in talks to settle rift with shareholders

Mon Nov 18, 2013 10:17am EST

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* Fresenius, B. Braun say in talks with Asklepios, Rhoen

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* B. Braun has blocking minority in Rhoen (Adds details on B. Braun, Asklepios's options, background)

By Ludwig Burger and Frank Siebelt

FRANKFURT, Nov 18 (Reuters) - German hospitals chain Rhoen-Klinikum is in talks to settle a dispute with dissident shareholders who have opposed a tie-up with diversified healthcare group Fresenius, two of the companies involved said on Monday.

Fresenius tried to take over Rhoen last year but failed after two shareholders blocked it. In September, it agreed to buy about two thirds of Rhoen's assets in a deal it said does not require shareholder approval.

Rhoen shareholder B. Braun, a medical supplies maker who had opposed the Fresenius-Rhoen tie-up, lifted its stake in Rhoen to an 11 percent blocking minority on Oct. 15.

A spokesman for Fresenius and a spokeswoman for B. Braun told Reuters that four-way talks with Fresenius and another Rhoen shareholder, unlisted hospitals chain Asklepios, were underway in an attempt to settle the acrimonious dispute.

An agreement could see the 3.1 billion euros ($4.2 billion) hospitals deal finally go ahead.

A spokesman for Rhoen Chairman and founder Eugen Muench and an Asklepios spokesman both declined to comment. Rhoen had no immediate comment.

The Fresenius spokesman added that Fresenius's purchase of hospitals that account for about two thirds of Rhoen's revenues was on track and would not be called into question during the talks.

"We are trying to create a situation where people no longer act against one another. We have an interest in everyone in the industry being able to again interact in a sensible way," said a Fresenius spokesman.

Legal experts and people familiar with the matter said that while B. Braun and Asklepios have decided not to seek an injunction against the hospitals deal, they could still call an extraordinary general meeting at Rhoen to request a vote on an investigation into the legality of the hospitals deal.

B. Braun and Asklepios could also take active roles in the ongoing checks by Germany's antitrust watchdog of the hospitals transactions, which could cause further delays.

Several sources said that talks are being held in person, with Fresenius Chief Executive Ulf Schneider, Asklepios owner Bernard Broermann, Rhoen's Muench as well as B. Braun Chairman Ludwig Georg Braun and B. Braun CEO Heinz-Walter Grosse attending.

B. Braun, owned by the family of Ludwig Georg Braun, competes with Fresenius in hospital equipment, such as intravenous and tube feeding supplies. It was concerned it would lose Rhoen as a major client should Fresenius take it over.

Asklepios has feared the emergence of a dominant rival. (Editing by Maria Sheahan and Louise Heavens)

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