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 Kermit the Frog has a new girlfriend named Denise
- 2 The excuses your boss is most likely to believe when you call in sick
- 3 Moscow voted the world's unfriendliest city
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
The one chart that shows how George Osborne is almost certainly going to be our next Prime Minister
The excuses your boss is most likely to believe when you call in sick
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Bono's group has made more money from Facebook investment than from all his music
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...