Brussels refers Blackstone bid nursing homes to UK watchdog

THE OFFICE of Fair Trading (OFT) is to investigate the pounds 563m takeover of the nursing homes business NHP by Blackstone, the private equity group, over fears it may be anti-competitive.

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.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'