NHP was forced to reveal it had received a takeover approach for the company after bid speculation had pushed shares in the nursing home and property firm up 21 per cent per cent in a month.
In May, NHP told investors that it was planning to dispose of Highfield Care, its nursing home operation, and a deal was expected to be announced with the group’s full-year results in December.
However, the new approach, revealed last night, is for the whole company, which also leases care homes to third parties, at a “slight premium to the current share price”. Yesterday shares rose 6½p or 3 per cent to 238½p valuing the company at £484 million.
NHP’s board emphasised yesterday that discussions with the potential bidder were at a “preliminary stage” and that there was no certainty that an offer would be made.
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Last night it was unclear who the interested party might be, but NHP held abortive bid talks with REIT Asset Management and Morgan Stanley in 2001. Some observers believe one of them may have returned.
Rumours of a bid for the company and a “buy” note from Merrill Lynch, the bank, have both helped to lift the stock in the past month.
Prospects for the company’s future were also seen to have improved because local authorities, who pay the fees of most of the group’s clients, are having to raise the amount they pay for care because of a shortage of beds.
In May NHP appointed NM Rothschild, the merchant bank, to find a buyer for Highfield Care which has 5,900 beds in its homes.
Run as an independent business, Highfield provided 72 per cent of the company’s £172 million turnover last year, although it made a small loss.
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At the time, the company said that any agreement would probably take the form of a management buyout backed by private equity.
NHP has been nursed back to health by Bill Colvin, chief executive, after almost going out of business in 2000.
The group began running its own care homes when a significant number of third-party operators, with which it had contracts, went into administration, sending NHP to the brink of financial ruin.