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Halifax confirms search for healthcare acquisition

Lea Paterson
Sunday 18 October 1998 23:02 BST
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HALIFAX, the former building society, yesterday confirmed it was still on the look-out for acquisitions in the healthcare sector, amid rumours of a possible link-up with Bupa, the private healthcare group.

The bank declined to comment directly on reports that it was considering a pounds 2bn bid for Bupa, the largest private healthcare organisation in the UK. However, a spokesman admitted that a healthcare company such as Bupa would fit well with Halifax's existing businesses.

The spokesman said: "It is no secret that we are looking at acquisitions. Healthcare companies are an area we are interested in, but we would never comment on specific institutions".

Halifax has an estimated pounds 3bn of surplus capital ear-marked for acquisitions. It is in the process of buying Birmingham Midshires, the building society, for pounds 750m, and has also been linked with larger financial rivals such as the Royal Bank of Scotland.

The bank has previously expressed an interest in moving into the healthcare sector, which would give it a new source of revenue at a time when margins in its mainstay mortgage business are under pressure. Last year it failed to buy PPP, one of Bupa's competitors, which eventually fell to Guardian Royal Exchange, the insurer, for pounds 580m.

A deal would give Bupa, which has had a difficult 12 months, additional balance-sheet strength. Profits at the group fell by 25 per cent last year to pounds 66m, and in April Peter Jacobs, chief executive, was replaced by Val Gooding.

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