Break-up begins at Four Seasons with £100m sale

BRITAIN’S second largest care home operator is being broken up with the sale of a group of hospitals for up to £100million.

Four Seasons collapsed last year under the weight of its debt and is now being run by administrators Alvarez & Marsal. City sources said the turnaround specialist had asked financiers from consultancy BDO to find a buyer for 11 or 12 hospitals from Four Seasons’ Huntercombe division, which looks after people with mental illnesses, learning disabilities and brain injuries.

Bankers said the batch of specialist care hospitals could change hands for between £70million and £100 million, as they generate about £5million a year in profit.

The sale would be the first step in breaking up the Four Seasons empire since the company went into administration in April last year, and will raise concerns among the families of residents and patients that they may face being moved to other homes or hospitals. The care home sector has come under huge pressure from rises in the minimum wage pushing up costs, and a fall in funding for residents from cashstrapped councils. Alvarez & Marsal is trying to restructure Four Seasons and is understood to be negotiating with landlords of its properties for lower rents.

The running of more than 40 care homes has been taken over by other care home operators as part of the restructuring negotiations. It is understood Four Seasons and the landlords took this decision to ensure that residents did not have to move.

A handful of homes have been closed, with local authorities stepping in to find alternative accommodation for residents. But sources said the closures were not directly connected to the company’s administration.

Four Seasons was started by former hotelier Robert Kilgour, who now runs the Renaissance care home chain in Scotland, in 1988. His venture came as Prime Minister Margaret Thatcher forced local authorities to allow private companies to run social care services.

In 2012, private equity tycoon Guy Hands bought the business for £825million through his firm Terra Firma Capital Partners. Hands injected £390million of capital, but failed to bring down the company’s debt burden, which ultimately led to its downfall.

In 2015, American hedge fund H/2 Capital Partners began buying the company’s loans and eventually became the group’s largest creditor. H/2 is a Connecticut-based hedge fund run by Spencer Haber, who made his fortune in the 1990s as a property dealmaker at the now defunct New York bank Lehman Brothers.

He took control of Four Seasons from Hands after it failed to meet a £26million debt interest payment in 2017. Then, on April 30 last year, the group’s holding company fell into administration. H/2 Capital remains its majority creditor.

Four Seasons declined to comment on the sale of the hospitals.