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Four Seasons: Ownership change not an option

by Jonathan Braude | Published February 21, 2012 at 8:36 AM

Britain's largest care home group, Four Seasons Health Care Ltd., on Monday, Feb. 20, denied a weekend press report it had put itself up for sale, claiming it was examining alternative sources of additional equity but not seeking a new owner.

The reaction came in response to a report in the Sunday Times newspaper that Hong Kong tycoon Li Ka-shing, as well as the Abu Dhabi Investment Authority, the Ontario Teachers' Pension Plan and an unnamed Chinese state-owned firm were considering making auction bids of between £850 million and £900 million ($1.35 billion to $1.43 billion). The newspaper said the Four Seasons was looking for ways to plug a potential gap of between £100 million and £200 million in its funding; was exploring a full sale of the business as one of several options; and had brought in Rothschild and Gleacher Shacklock LLP to advise on the process.

But in a sharp rebuttal, Four Seasons said it had not put itself on sale. Instead, it said it was "exploring equity raising opportunities alongside refinancing of our debt."

It said it was considering capital structures to ensure that appropriate levels of funds would be in place by September 2012, when its remaining debt matures. It declined to specify the exact sums required, but said the possible solutions could include refinancing, new equity from existing shareholders as well as potential funding from new investors or combinations of those options.

Four Seasons, which took over as the country's largest care home provider when Southern Cross Healthcare Group plc collapsed last year, went through a crisis restructuring in 2009. Its lenders, led by largely taxpayer-owned Royal Bank of Scotland Group plc, agreed to take a stake in the business in return for halving its £1.5 billion debt pile. Then in 2010 the maturity of the remaining debt was extended to 2012.

Four Seasons, of Wilmslow, England, had been saddled with these huge debts left over from its 2006 acquisition by Qatar Investment Authority-backed investor Three Delta LLP. Three Delta had bought the business from Allianz Capital Partners GmbH, the private equity arm of German insurer Allianz SE, which in turn had bought the company from Alchemy Partners LLP for £775 million in 2004.

The company is now 40%-owned by Royal Bank but has a number of other investors and institutions on its shareholder register. Some have reportedly expressed interest in supporting the business with further equity investments, but not all have been ready to step up to the plate. Four Seasons declined to comment on which existing lenders and investors might be prepared to help or by how much and was equally silent on the identity of potential new equity investors.

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Tags: Abu Dhabi Investment Authority | Four Seasons Health Care Ltd. | M&A

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Four Seasons: Ownership change not an option

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