BUPA 'puts hospitals up for sale' in UK

Private healthcare giant BUPA has put its UK hospitals up for sale in a move that could raise £1.2bn (€1.75bn) or more, it was reported today.

It is thought that proceeds from the sale of the 26-strong estate could be used to fund expansion of its care homes business, which has 298 sites in UK. The group also has sizeable insurance operations in the UK and overseas.

The Sunday Times said private equity groups and overseas investors were likely to show an interest in the business, fuelling a wider restructuring of the UK health scene as other healthcare providers may also change hands.

BUPA declined to comment today ahead of a statement to its bondholders on Tuesday. It is not known whether any buyer would be able to continue to use the BUPA brand.

BUPA, established in 1947, has 8.1 million customers in 190 countries and employs 46,000 people. As a provident, BUPA does not have shareholders and profits are ploughed back into patient care.

As well as its board of directors, oversight is provided by 100 members who have no direct economic interest in the company.

Hospitals accounted for 11% of BUPA’s 2006 revenues, which were up 9% to £4.25bn (€6.23bn). Pre-tax profits for the group improved by 15% to £359.1m (€527m), with the operating surplus for hospitals down 15% to £42.7 million following the sale of nine smaller hospitals in 2005.

In the results last month, the group said it had continued to invest in winning NHS contracts and in August was appointed to the NHS Extended Choice Network (ECN) – a service that was set up to alleviate NHS waiting lists.

Today’s report will raise speculation that BUPA could sell other assets or even the entire company. With no shareholders to receive proceeds, it could lead to the establishment of a medical trust along the lines of the Wellcome Trust.

The group’s non-UK businesses now account for 33% of revenues and 36% of operating profits, boosted by growth in the expatriate sector. The international profile of the business follows expansion led by Val Gooding, who has been BUPA’s chief executive since August 1998.