Assura praises KKR's proposed offer
Updated Battle for Assura's Takeover Reaches Conclusion
The fierce struggle over Assura's acquisition has come to an end, with KKR's bid to seize control of the healthcare property titan gaining EU approval, should the deal push through.
Last week, Assura accepted KKR's £1.7bn offer, made via acquisition vehicle Sana Bidco. The merger has since received the nod from the European Commission. This development marks another company bidding farewell to the London Stock Exchange, as international giants snatch up cheap British assets.
The KKR-Stonepeak duo's acquisition vehicle previously faced stiff competition from Primary Health Properties. The two companies have been engaged in a bidding war since February, with the competition driving up the offer price from £1.56bn to KKR's "best and final" offer of £1.7bn.
However, Assura's major shareholders aren't entirely thrilled about the deal. Quilter Cheviot and Schroders, owning around 6 per cent and 5 per cent of shares in the NHS landlord respectively, express a preference for PHP over KKR. Allianz, Gravis, and Baillie Gifford have also supported PHP, arguing that it offers better value for Assura.
Last week, PHP encouraged Assura shareholders to refrain from responding to KKR's offer, deeming a PHP-Assura merger a "highly compelling proposition." The company emphasized its belief that the sector is at the brink of an economic cycle inflection point, with strong rental growth and lower interest rates boosting primary care property values, and net asset values per share expected to rise continuously.
PHP even attempted to sweeten its deal by lowering Assura's acceptance conditions and vowing to accelerate its quarterly dividend in October. Despite these efforts, Assura's share price has risen significantly in the ongoing bidding war, surge more than 33 per cent since February.
Institutional investors, who find value in the combined entity's scale, PHP's track record, premium offer terms, and the blend of cash and equity exposure in the new structure, are among the shareholders supporting PHP. However, the exact names of these investors are not explicitly detailed in the available data.
While Assura’s Board has flagged concerns about PHP's leveraging and refinancing strategies, PHP has disclosed plans to manage these issues, suggesting its offer finds backing from shareholders who are confident in its financial strategy.
In the concluding phase of Assura's takeover, the KKR-led acquisition finances have received EU approval, with the deal potentially moving forward. The fierce competition with Primary Health Properties in the property sector, particularly in the healthcare sector, marked a significant part of the bidding war.
