Bupa beat off fierce competition to clinch the deal after the business was put up for sale by Greenalls following its pounds 518m takeover of previous owners, the rival pub and hotel group Boddington at the end of last year.
It marks the healthcare group's return to the nursing home sector after selling its own 10 homes to Boddington for pounds 27m in December 1994. It now regains those original 10 and picks up 20 more, giving it 1,250 registered beds, plus another home operated under a management contract.
Edward Lea, Bupa's finance director, said: "This was an opportunity to gain critical mass in a market which we didn't have before." He said it planned to double the size of Country House over the next five to seven years, spending between pounds 50m and pounds 70m over that period to raise bed numbers to around 2,500. There would be opportunities to move out of the South- east of England, where most of the Country House homes are situated, both through purpose-built operations and acquisitions.
The move fits in with the group's strategy of widening its scope, he said. Last week it launched Bupa FutureCare, a new form of insurance which provides nursing care for people when they can no longer look after themselves.
Greenalls chairman and chief executive, Andrew Thomas, said: "Country House is an excellent business, but nursing homes are not an area in which we would wish to invest further."
The proceeds would go to repay debt and invest further in the group's pubs and hotels, he said. The group has set itself the target of cutting gearing from just below 75 per cent immediately following the Boddington purchase to under 70 per cent by this September. The full pounds 68m proceeds would cut that figure to 63 per cent, but it is expected that Greenalls will reinvest up to half the total in the business.
Investment is likely to be skewed towards the restaurant and hotel divisions. Greenalls owns 165 restaurants, including the Miller's Kitchen and Henry's Table brands and the 45-strong Premier Lodge chain, which ranks behind Granada's Travelodge and Whitbread's Travel Inn in size.
Country House made profits of pounds 6.1m in the year to last December, when it had net assets, free of debt and cash, of pounds 66m. Up to 20 groups were initially involved in bidding for the business in an auction organised by Schroders, the merchant bank. One of the beaten bidders, Glasgow-based operator Ashbourne, said yesterday the price paid by Bupa "should tell everyone that the sector, particularly the top end, is undervalued".
Greenalls shares added 8p to 632p yesterday.