London-based private equity firm CVC Capital Partners and a consortium of investors including Patron Capital are said to be among a list of potential buyers for embattled British care home operator Four Seasons, in a deal that could be worth as much as £900m.
According to Dow Jones, the firms and around four other interested parties are bidding for a minority or majority stake in the business. Other reports confirmed that these include Abu Dhabi Investment Authority and Ontario Teachers’ Pension Plan.
Reports last month also indicated that the distressed debt arm of KKR has bought a significant chunk of the debt owed by Four Seasons, which fuelled speculation that the global private equity major could be looking to take control of the company.
The news followed talks between shareholders over a restructuring of the company’s finances. Four Seasons is seeking fresh equity and debt ahead of loan covenants due in September, when £780m of its debt will mature.
Four Seasons, which owns 500 care homes that house around 25,000 residents, became the largest care home operator after Blackstone-backed Southern Cross controversially collapsed last year.
Although the group expects to raise a sizeable amount of cash to repay the debt, a shortfall of between £100m and £150m is expected, which will hopefully raised by existing shareholders, including Royal Bank of Scotland, which owns a 40 per cent stake. The Qatar Investment Authority also owns a significant stake in the business.
The alternative to this would be that KKR could launch a rival restructuring plan that would see the firm wrest control of the company, a move that would be significantly bolstered by its ownership of a large amount of Four Seasons’ debt.
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