Debt owner closes in on care home deal

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Relief has been expressed at the revelation that the US hedge fund H2 Capital is on the point of buying most of the assets Four Seasons Health Care’s (FSHC), the second-largest care home operator in the UK. This will secure the future of 325 care homes and the jobs of more than 20,000 people, as well as the welfare of 17,00 patients.

H2 Capital is about to announce the purchase of FSHC’s freehold properties. The remaining 140 leasehold properties are expected to be sold separately, perhaps in multiple transactions, but HS2 is understood to have offered a financial guarantee which will ensure their continuing operation until a sale is agreed.

H2 has been FSHC’s largest creditor for years and has effectively controlled the business, which was put into administration in April, since Terra Firma ceded control of the business in 2017 after defaulting on a debt repayment. FSHC has total debt of around £730m. It has been widely assumed that H2 would be the most likely buyer of most or all of the assets but it said that it faced competition from Davidson Kempner and Cheyne Capital among others before aching agreement with Alvarez & Marsan, the administrators.

None of the parties is willing to comment at this stage and the price at which the deal will be struck is not known. Previous speculation has suggested that the entire group has a value of around £400m.

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