Orpea - comment

Orpea, the French listed European nursing home, suspended its shares yesterday on the back of revelations from a book alleging malpractice. Orpea operates over 1,100 facilities totalling 112,000 beds. The shares were down 16% when the stock was suspended yesterday. Bonds are off 4-5 points, but even after the drop, they still yield less than 3%.

The allegation is from an extract of a book due to be released today about the overall industry but concentrates on Orpea and the balance between costs and care at nursing homes. It should be noted that the industry is highly regulated with regular inspections. We will continue to monitor but are not expecting a distressed play in this name.