Germans eye takeover of Priory rehab clinics

A German healthcare group backed by Carlyle, the buyout firm, is joining the race to seal a £1.2bn takeover of Priory Group, the British company best-known for its rehabilitation work with celebrities.

Sky News has learnt that Schoen Klinik, which employs nearly 11,000 people, is among a pack of bidders who want to acquire the Priory chain from its American owner.

Some parties are understood to be planning to submit offers for the business on Tuesday, according to people close to the process.

Acadia Healthcare, which is listed in New York, bought Priory Group in 2016 for £1.5bn, but found its plans curtailed by an unexpectedly hostile response from competition regulators.

It has also been hurt financially by its reliance on more expensive agency staff, and difficulties recruiting nurses.

A number of its hospitals have been criticised and fined over the mistreatment of vulnerable patients.

Sources said that Schoen Klinik was expected to bid for the British company directly, although it is expected to secure financial backing for any deal from Carlyle.

Priory is among the most prominent privately owned healthcare businesses in the UK, largely because of the media attention that celebrities such as Kate Moss have attracted during stints as patients at its facilities.

The company was founded in 1980 with the purchase of its first hospital in Roehampton, south-west London, which itself has been open since 1872.

Following its sale to Acadia, it merged with Partnerships in Care, another UK company, adding almost 1900 beds to the group.

Acadia's chief executive, Debbie Osteen, said last May that she would consider "strategic alternatives" for Priory Group, but insisted that it would only be sold if it achieved a satisfactory price.

There has been speculation that it could be broken up, with its mental healthcare and social care-focused divisions sold separately.

Other bidders for the business are reported to include Ramsay Health Care, an Australian group, and the Canadian investment group Brookfield.

In total, it runs more than 300 facilities and employs well over 10,000 people.

The auction of Priory Group is being handled by bankers at Rothschild.

Carlyle and Acadia declined to comment.