Bupa remains coy about mass care home sell-off
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While the Financial Times and Health Investor magazine have both reported that Bupa is to put about 200 of its 290 care homes up for sale, naming Knight Frank as the agent appointed to run the auction process, Bupa told Caring Times on October 21st that the reports were ‘market speculation’ and would make no further comment.
It has been reported that the decision to offer more than two-thirds of its care home portfolio for sale was made at a meeting of Bupa’s board held in September, with Bupa looking to sell the homes within the next 12 months. A source has been quoted as saying that as part of the move, Bupa’s care homes division would be split into two parts, called Lifestyle and Partnership, with 20,000 staff transferring from Bupa to the new owner once the sale has been completed.
The Financial Times has commented that the decision to divest the homes comes amid widening losses in the sector and financial turmoil at the big operators, such as Four Seasons Health Care, owned by private equity group Terra Firma. Bupa reported a £1.2m loss in its UK care home business last year, against a £16.2m profit the year before. The FT says it is seeking to reduce debt ahead of European Union Solvency II regulations that come into force next January. The rules aim to ensure that insurers have sufficient capital to cover unexpected shocks.