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Alliance Medical and Priory to be sold

Failed flotation attempts and search for long-term stability prompt sale of UK medical groups

Alliance Medical is likely to be put up for sale on Wednesday by its adviser, private equity group Blackstone, reports the Times.

Alliance's lenders reportedly wrote to its directors on 23 August asking them to explore sale options, a request which the board is likely to approve on Wednesday.

Blackstone will also discuss other options such as a fresh cash injection by another firm. Deloitte and Blackstone have valued the company at £300m to £340m.

The lenders under advice by Deloitte have rejected a £35m cash-flow into Alliance from its owner Dubai International Capital and its mezzanine lenders, led by Och-Ziff, believing the capital to be inadequate in providing the company with long-term stability.

Another healthcare enterprise, the Priory Group, has also been put for up sale, and is expected to fetch £1bn.

The Royal Bank of Scotland, which inherited a stake in the Priory in 2007 from ABN Amro, has decided to sell the rehabilitation clinic chain - which is famous for its celebrity patients - after failed attempts at flotation and a merger with Four Seasons.