Southern Cross In Talks With Potential Buyers

Southern Cross Healthcare Group is in talks with potential suitors after New York and London-based private equity firm Towerbrook Capital walked away from a potential deal, Reuters reported. Southern Cross, a U.K.-based home healthcare operator, was in talks with Towerbrook in August but the private equity firm declined to make an offer for the company.

(Reuters) – Care home operator Southern Cross Healthcare Group said on Thursday it was in early-stage talks with other potential buyers after private equity firm Towerbrook Capital walked away without making an offer.

Towerbrook said in August it was considering whether to bid for Southern Cross, sending shares in the British company, which has been hit hard by government cuts, up as much as 64 percent.

Southern Cross initially declined to enter talks with the London and New York-based firm, but it later started to explore options, during which it said other parties expressed potential interest in the company.

“While these approaches are highly preliminary in nature, the board believes it to be in shareholders’ interest to continue to hold exploratory discussions,” it said in a statement on Thursday.

Southern Cross, which operates homes with capacity for about 37,000 beds, also said its year would be in-line with the guidance given in August, when it warned that pressure on public spending was hitting admissions.

It said at the time that core earnings for the year would be around 53 million pounds ($83.53 million), falling short of analysts’ expectations. [ID:nLDE67808W]

Its shares were 4.6 percent higher at 17 pence by 1317 GMT, valuing the group at about 32 million pounds.

(Reporting by Paul Sandle, Editing by Rosalba O’Brien)