£125m pay day for racing tycoons
IRISH horseracing tycoons John Magnier, JP McManus and Dermot Desmond are set to double their money on a bet on nursing homes.
Between them, the billionaires own 51% of Barchester Healthcare, Britain's fourth-biggest care home operator, which is set to raise £1bn in a refinancing that will see the company split in two.
Royal Bank of Scotland is leading a consortium of banks that will provide £1bn of debt funding to Barchester. Half will be used to restructure debt, while £500m will be returned to the group's equity investors, who also include chief executive Mike Parsons and Denis Brosnan, the chairman and former boss of Irish food giant Kerry Foods.
Magnier, McManus and Desmond invested in Barchester in 1994, a year after the company was set up by Parsons. The Irishmen will share £125m, roughly double their original investment. This will be the latest success for the trio, who have been involved in a string of high-profile business successes.
In 1997, McManus, along with Desmond, bought the Sandy Lane resort in Barbados for £38m. McManus and Magnier later went on to become major investors in Manchester United Football Club.
Barchester runs 172 care homes in England, Scotland and Wales, providing residential care to 10,000 people who each pay £650 a week.
The company generates annual revenues of £350m and is expected to increase profits by £20m to £90m this year.
The restructuring will see Barchester split into two separate companies, one focusing on operating the business, the other a property holding company.
Parsons said: 'We looked at the possibility of a stock market flotation, but felt it was not for us at the moment. The shareholders have no desire to sell. The market conditions in the City are not right.'
Parsons added that the company was still looking for takeovers after its 2004 purchase of Westminster Healthcare for £525m.
'We have sufficient funding to buy other care homes, such as small regional companies offering the same sort of quality,' he said.
The company, which claims to offer a premium service to its clients, is also spending more than £35m developing an additional 1,100 beds across 30 sites.
While the nursing home sector has been growing in popularity with investors, Southern Cross Healthcare Group, Britain's biggest care homes operator, was forced to abandon a planned £550m listing earlier this month because of turbulent stock markets.
Most watched Money videos
- Share picks for 2025: From Nvidia to a FTSE stalwart
- 1987 Volkswagen advert champions the reliability of their cars
- Famous 1986 Land Rover Defender advert that saw a car climb a dam
- Boreham Motorworks unveils the limited-edition Mk1 Ford Escort
- Ford presents new Puma Gen E: Best seller goes electric
- Relive the iconic Renault Megane advert from 2005
- How to buy the best UK shares at a cheaper price
- Mercedes-Benz launch wacky advert of a dancing chicken
- Toyota relaunches Urban Cruiser as an electric tech-rich crossover
- Jaguar's EV concept revealed: Type 00 comes in two colours
- Snoop Dogg in film announcing Publicis as largest advertising agency
- Tesla UK unveils look of sleek CyberCab in London's Westfield
- Fears over IHT raid on pensions may be 'overcooked', says...
- Reeves faces a fiscal storm: Bleak outlook for the...
- Car insurance premiums saw record fall in 2024 - with...
- Faberge owner Gemfields hit by Zambia emerald tax
- Do you hold one of the investment trusts facing a US...
- Liverpool tycoon behind Home Bargains pockets a £1.2bn...
- Gilt yields show the UK can't borrow for growth so let's...
- MARKET REPORT: Blue chips turn red amid turmoil on bond...
- Oil giant Shell warns of £2bn blow as it struggles to...
- Jaguar sales take a nosedive after fierce backlash to...
- Marks & Spencer saw blockbuster Christmas trade including...
- How Carter saved the economy - but not his presidency:...
- B&M shares dip 13% as discount retailer's festive sales...
- American football winning streak costs Flutter £300m as...
- Interest rates could be 2.5% by late 2027, economist...
- Do you own one of the most scrapped cars of 2024? Number...
- Saba lures in Herald shareholders with cash exit offer
- UK borrowing costs soar to 27-year high: What are gilts...