Assura likely to recommend new KKR offer to investors
Healthcare property group Assura said it has received an indicative, non-binding proposal from KKR and Stonepeak Partners for 49.4p per share.
The offer, which is a premium of 31.9 per cent to the closing share price of 37.4 pence on February 13, values Assura’s share capital at about £1.6bn.
Assura’s share price shot up by 14.17 per cent on the news, to 46.5p per share.
The Assura board said it is likely to recommend the offer to shareholders and will engage in discussions with KKR and Stonepeak.
This is the fifth offer KKR have made Assura since last September.
The latest offer was in February, when it received an offer from KKR and USS Investment Management in February, which it rejected for being too low.
Assura also announced today that it has rejected an offer from Primary Health Properties at 43p per share.
“[The higher offer than in February] implies that KKR is prepared to do whatever it takes to secure the deal,” AJ Bell analyst Russ Mould said.
“The fact Assura’s share price at 46.48p is trading below KKR’s latest proposal implies the market doesn’t believe Primary Health Properties is going to come back with a significantly better offer.
“It also suggests scepticism that the new KKR proposal is a done deal. The 31.9 per cent bid premium is significantly below the 47 per cent average for UK takeovers in 2024, meaning Assura’s shareholders might feel they aren’t being compensated adequately.
“After all, they would be giving up an investment that could generate much greater returns over time,” Mould added.
Panmure Liberum analysts rated Assura’s stock a ‘Buy’, but said the higher bid “doesn’t materially change our view that these levels are still insufficient to compensate equity holders for giving up a company with these long-term growth prospects”.