January 24, 2013 / 3:55 PM / in 5 years

UPDATE 1-Rhoen seeks talks with shareholders on alliances

* Merger is still Rhoen’s prefered option

* Says Giessen-Marburg hospital could break even end-2014 (Adds CFO quote, details)

By Andreas Kröner

FRANKFURT, Jan 24 (Reuters) - Rhoen-Klinikum will try to persuade shareholders that blocked its merger with a larger hospitals firm last year to support Rhoen in forging an alliance with peers instead.

Rhoen said on Thursday it would seek to get backing from investors for possible collaboration agreements if they are unwilling to reconsider a merger, which remains its prefered option.

“A tie-up based on cooperation agreements is not as robust (as a merger),” Chief Executive Martin Siebert said.

Rhoen’s founder last year failed to pull off a deal with Fresenius after underestiming opposition from shareholders such as rival hospital operator Asklepios and medical gear supplier B.Braun.

The tie-up would have created a dominant hospitals chain large enough to offer its own medical insurance.

Rhoen executives told journalists on Thursday that they aim to ask investors what the company could do to allay concerns about another merger attempt.

“We will see whether the reason (behind opposing a tie-up) is of permanent nature or not,” Rhoen’s finance chief Jens-Peter Neumann said.

Shares in Rhoen-Klinikum extended gains to trade 1.1 percent higher on the news.

Asklepios and B.Braun declined to comment.

The two last year vetoed Fresenius’s merger approach to prevent the emergence of an dominant player in the German private-sector hospitals market. Fresenius would have folded Rhoen into its own hospitals chain Helios, already Germany’s largest.

On another front, Rhoen is struggling to fix problems at Giessen-Marburg, Germany’s only privately owned university teaching hospital. It had to cut its full-year outlook twice last year because of wage hikes and losses there.

Plans to restructure Giessen-Marburg have been delayed, complicated by the fact that the German state of Hesse remains in charge of medical research and teaching at the hospital.

CEO Siebert said on Thursday that McKinsey consultants have a plan that would see the hospital return to profit by end-2014 by cutting more than 250 jobs, among other measures.

He said talks with the state over restructuring would finish soon.

Rhoen would target a group-wide margin of earnings before interest, taxes, depreciation and amortisation (EBITDA) over sales of 14 percent, up from 10.1 percent in the first nine months of 2012, the company added. (Additional reporting by Ludwig Burger; Editing by Erica Billingham)

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