"Southern Cross will be the largest care-home operator on theLondon exchange," says non-executive chairman Bill Colvin. Since itwas bought by the American private-equity firm Blackstone CapitalPartners for euro 236.87 million ($298.94 million) in 2004,Southern Cross has expanded rapidly, tripling the number of homesit manages in an attempt to cash in on rising government healthcarespending and an aging UK population.

At the same time as the company offers a tranche of new shares,Blackstone plans to sell about half of its 88% stake in SouthernCross but will remain the company's largest investor. The UKhealthcare market is currently consolidating and Southern Crossintends to use the cash raised to expand via acquisitions. Lastyear it bought Highfield Care for euro 17.11 ($21.59 billion).

The government changed the financing of care in the mid-1990s bytransferring funding for nursing homes to local councils. The localauthorities ran out of money, care-home operators found themselveswith too many empty beds and a number went bankrupt.