Priori Mulls Bids for Four Seasons

Four Seasons is the target of bid speculation amid an expectation that its creditors will look to sell it.

Specialist healthcare provider The Priory Group is reported to have held discussions with three buyout firms about the possibility of launching a joint bid for Four Seasons, the UK’s third largest care home operator.

The Priory Group has appointed UBS to advise on a possible bid for Four Seasons.

Apax, Blackstone and KKR were named by the Financial Times as private equity firms which had spoken to The Priory about a potential bid.

The Priory is owned by Royal Bank of Scotland, which is also a significant debt-holder in Four Seasons. RBS acquired The Priory through its acquisition of ABN AMRO last year.

Last week, Four Seasons was given extra time to restructure a £1.5bn (US$2.48bn) debt package which has been strangling the company over the course of 2008.

Four Seasons has not yet been put up for sale. Its creditors are expected to agree a debt-for-equity swap before a new deadline of January 22. Should the deal go ahead, senior lenders Cheyne Capital, Marathon Asset Management and a Morgan Stanley Real Estate fund are reported to stand to take on a combined majority equity stake.

If an auction does materialise, rival care homes operator Southern Cross could also launch a bid for the company. Other private equity firms could also emerge as potential buyers for the company.

Before being controlled by its debt holders, Four Seasons was owned by Qatar Investment Authority. The group acquired it in 2006 in a £1.4bn leveraged buyout which involved an 11 tranche debt package.

Source: Thomson Merger News