Saga puts care unit on the block amid break-up threat

Saga puts care unit on the block amid break-up threat
By: Business Posted On: December 08, 2019 View: 86

Saga puts care unit on the block amid break-up threat

Saga, the FTSE-250 travel and insurance provider, is seeking a buyer for its domiciliary care business as it faces the threat of a break-up engineered by one of the world's most feared activist investors.

Sky News has learnt that Saga is working with advisers on the sale of Patricia White's and Country Cousins, two live-in care brands which last year recorded revenues of just under £4m.

The assets have been put up for sale in the wake of pressure from investors for Saga to boost its flagging share price, which has halved over the last year.

Grant Thornton, the accountancy firm, has been hired to handle an auction of the operations, which between them have a book of 1,500 carers.

In July, Elliott Advisers, which has built stakes in companies including the shopping centre-owner Hammerson, bought a 5% stake in Saga, which targets products at the over-50s market.

Elliott has yet to disclose publicly its intentions for its stake, which it acquired during the company's search for a new chief executive.

Its hunt for a replacement for Lance Batchelor remains ongoing.

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Saga is understood to have concluded that Patricia White's and Country Cousins are non-core, although it is continuing to trial a domiciliary care business under its own brand.

"The board believes in the opportunity for and ability of the group to return to sustainable growth and restore value for all shareholders and is supporting the executive team as they focus on the profitability of our core travel and insurance businesses as well as the capital efficiency of the group," Saga said in September.

The FTSE-250 company's performance has been clouded by what it says is Brexit-related uncertainty in its travel arm as well as insurance pricing issues.

Saga declined to comment on Sunday.

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