Assura rejects £1.5bn offer as ‘not sufficient’ amid new ‘fair’ KKR bid
Real estate investment trust Assura has rejected a £1.5bn offer from fellow GP landlord Primary Health Properties (PHP) as too low, and received a fresh bid from KKR.
After the development was confirmed, Assura’s share price rose nearly six per cent in early trades.
Assura rejected the new offer, at 46.2p per share, as “not at a level that is sufficient to be recommended to shareholders”. The board said it had pushed back the PHP proposal “unanimously”.
Assura has rejected four separate takeover attempts for a similar amount from private equity giant KKR so far this year, but said it would be “minded to accept” a possible £1.6bn bid from the private equity house.
Analysts at Panmure Liberum has argued that the offer from PHP should be preferable to shareholders due to the “significant cost and operating synergies” between the two businesses, along with the fact that Assura’s assets are “socially critical infrastructure which could be monopolised in by private equity”.
Assura’s share price has jumped more than 25 per cent so far this year when the bidding war began, and is currently trading at 48p per share.
It is set to heavily benefit from the government’s spending spree, with Labour committing to use more private healthcare providers to help clear the NHS treatment backlog.
New ‘fair and reasonable’ KKR offer for Assura
Assura received an offer by new company Bidco at 48.56p per share on the morning of April 9, valuing Assura at £1.6bn.
Bidco is a newly-formed company indirectly wholly owned by KKR-advised funds and Stonepeak-advised funds.
The acquisition has been recommended unanimously by Assura’s board to shareholders, describing the offer as “fair and reasonable”, it said.
“Against the backdrop of shifting demographic and structural trends, KKR and Stonepeak believe that Assura has a crucial and growing role to play in the provision of critical healthcare infrastructure in the UK and Ireland over the long term,” Assura said.