Dbay Advisors outbids founders for CareTech buyout

PRIVATE equity firm Dbay Advisors has evinced interest in the UK’s largest social care provider CareTech Holdings.

It made a non-binding offer of 750p a share to buy out CareTech. The Indicative price is 25p more than the offer made by its co-founders, the Kenyan-born Sheikh siblings - Haroon and Farouq.

In a filing to the London Stock Exchange, CareTech said Dbay’s proposal included “a partial non-voting share alternative to allow shareholders to roll over some of their investment and retain an interest in CareTech's future”.

The brothers initially offered 710p a share last month and then raised it to 725p before Dbay came up with the possible cash offer on Friday (1).

CareTech shares, traded on the alternative investment market (AIM) platform of the LSE, gained 0.54 per cent on Wednesday (7) to close at 744p. However, the stock has soared 52p from 692p levels since Dbay made its offer.

CareTech provides specialist social care and education services for about 5,000 adults and children with complex needs.

It was founded in 1993 and has more than 550 residential facilities and specialist schools in the UK with an employee count of about 11,500.

Spearheaded by Farouq as its executive chairman and Haroon as its CEO, the social care provider has a range of supported living schemes that include individual flats, houses and grouped accommodation arrangements.

Dbay has already bought a 1.8 per cent stake in CareTech from the open market.

CareTech’s founders told The Times last month that they were in the early stages of forming a consortium, including with the investment house THCP, for a possible offer for the firm.