The bidding battle for Assura, the NHS landlord, has intensified as US private equity firm KKR lobbied the board to accept its takeover offer, while the Competition and Markets Authority (CMA) stepped up its investigation into a rival bid by UK healthcare investor Primary Health Properties (PHP).
PHP, which invests in buildings housing GP practices, has been blocked from fully integrating Assura by the CMA, which served an initial enforcement order after launching an investigation last month to determine whether the deal would substantially lessen competition. PHP won backing from Assura's board in June for its cash and shares offer worth £1.79bn at the time, following a lengthy bidding war with KKR.
KKR, leading a bid with Stonepeak Partners, urged Assura's board to withdraw support for PHP's offer and back its own cash takeover worth £1.696bn. KKR argued that its bid raised no competition concerns, while a PHP-Assura merger would likely require asset sales. However, Assura stated on Friday that its directors still believed the PHP offer was in the best interests of shareholders.
Some long-term shareholders, including Schroders and Aberdeen Investments, back the PHP takeover. Analyst Bjorn Zietsman of Panmure Liberum said PHP's offer was "the superior choice for shareholders" as it would create a UK market leader in primary healthcare real estate, while KKR's offer would lose future strategic benefits. Shore Capital's Andrew Saunders said PHP remained well placed to clear the 50% acceptance hurdle by Tuesday's deadline.
Assura, founded in Altrincham in 2003 and listed on the FTSE 250, owns 603 properties housing doctors' surgeries and hospitals, serving over 6 million patients, many rented to the NHS. Its rental income rose 16.6% to £167m last year, with pre-tax profit of £166m. PHP owns 516 properties in the UK and Ireland, valued at £2.8bn.
