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Bupa launches surprise auction of UK hospitals

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Bupa has put all its UK hospitals up for sale.


The company is Britain’s largest private healthcare group. It runs 26 hospitals in the UK which last year looked after 800,000 patients, 5% of which were NHS cases.


The hospitals could fetch £1.2 billion or more, with a long list of potential buyers. Bupa has appointed the investment bank Citigroup to handle the sale. Private-equity groups such as Blackstone and Cinven are likely to show an interest, as well as Australia’s Macquarie bank and the French private health group, Générale de Santé. Several big Middle East and Asian investors are also expected to be in the hunt.


Bupa has confirmed it is in preliminary discussions with potential hospital purchasers but stresses it is not considering the sale of any other part of the group. It is not known whether a buyer would be able to continue to use the Bupa brand, or whether Bupa would sever its links entirely.


One suggestion is that proceeds from the hospital sale could be used for a big expansion into care homes - Bupa has 298 in the UK, with 18,500 residents. Another use would be for overseas expansion. Bupa now has operations in Australia, America, Scandinavia and the Far East, and has 8.1m customers worldwide.


Bupa has 4m customers in the UK


Most people assume that the company is a mutual, but that is not the case. It is actually a company limited by guarantee. Bupa has no shareholders, and oversight is provided by a group of 100 eminent “members” who have no direct economic interest in the group. Surpluses are invested back into the business. Private-equity buyers have recently made approaches that would value the entire group at more than £5 billion. The offers were rejected.


Private medical insurance: News update: April 2007


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