NURSING-HOMES operator Four Seasons is expected to be put up for sale in the coming weeks for half the £1.4 billion it was bought for only two years ago.

The decision to find a buyer for the highly indebted company has been made because financial restructuring talks between its lenders have failed.

The process will attract several leading private-equity firms, including Blackstone, Kohlberg Kravis Roberts and Apax, which have expressed interest in buying the crisis-hit firm at a huge discount.

The accountancy firm Price Waterhouse Coopers is expected to send out an information memorandum to prospective bidders in the coming weeks. PWC has been negotiating on behalf of the firm with its lenders after it breached its banking agreements earlier this year.

Banking advisers said that Four Seasons could draw offers of £800m or less, which would be a considerable embarrassment for the Qatar Investment Authority, which bought the company in 2006 and will see its £110m equity stake wiped out.

Discussions with lenders intensified last month after the Qataris missed a deadline to refinance a £1.4 billion loan used to back their takeover.

The decision to find a buyer for the business will prove unpopular with several of the debt holders, who could also make significant losses. RBS is one of the biggest holders of the senior debt. It is thought that junior debt-holders, who include Morgan Stanley Real Estate Finance and the hedge funds Cheyne and Marathon, would prefer to postpone any sale and instead seek to refinance the company’s debt when some confidence has returned to the markets.

City sources say a number of private-equity firms are interested in merging Four Seasons with Southern Cross, another troubled care-home operator.

However, others cautioned that Southern Cross’s management was unlikely to agree to a takeover that would be unpopular with investors. They have seen more than 86% wiped off the company’s value in less than a year.

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