Brussels refers Blackstone bid nursing homes to UK watchdog
Thursday 03 February 2005
Due to its size, the European Commission was reviewing the deal, which would have seen NHP merge with Blackstone's Southern Cross nursing homes business. But after a request by the OFT, the Commission said yesterday it would hand the investigation back to the UK authority. "The transaction will lead to some horizontal overlaps between the parties. [They] would become the biggest service provider in some local areas," the Commission said.
The OFT believes there could be competition issues in three areas, Arbroath, Nottingham and Port Talbot, where a merged Southern Cross and NHP would have a high combined market share. "The Commission has decided to refer the case as the concentration affects competition in a distinct market within the UK," Brussels said.
Blackstone announced its acquisition of NHP, one of the largest care homes providers in the UK, in November, only two months after its takeover of Southern Cross. NHP owns about 355 care homes, but only manages about half of them, and Southern Cross is one of its largest tenants. Through a takeover of NHP, Blackstone had hoped to cut costs. The two businesses would control about 18,000 care-home beds, a market share of up to 4 per cent. But its concentration in some regions is alarming UK competition bodies.
Upwards of pounds 1bn of nursing home assets are on the market at the moment amid a frenzy of corporate activity in what is a highly fragmented, but growing, care homes market.
Blackstone missed out on the takeover of Westminster Healthcare last year, which was bought instead by Barchester, a chain owned by the Irish entrepreneurs, Dermot Desmond, John Magnier and J P McManus, in a deal worth pounds 525m. Four Seasons, the second largest UK operator behind Bupa, was sold to the German insurer, Allianz, in July last year for pounds 775m. Also believed to be preparing for a sale is Ashbourne Healthcare, and BetterCare, a 3i-owned venture.
Paul Sapel, of LCS International, a consultant to the healthcare industry, believes the OFT investigation could have significant ramifications on other takeover deals. "The OFT is rattling the cage of the sector. A lot of companies thought they could keep buying other nursing home businesses may have to revisit their plans," he said. "But there is now a clear signal to the market that the OFT may restrict deals, which may put some people off bidding or lower the value of assets."
With an ageing population and a wealthier generation of elderly people, care-home beds are increasingly in demand.
- 1 Woman accidentally shoots herself in the head while posing for a selfie
- 2 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 4 Female Muay Thai champion hustles coaches to give them a beating
- 5 16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Purity balls: Girls in the US making virginity pledges as fathers vow to 'protect purity'
Female Muay Thai champion hustles coaches to give them a beating
Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...