GP landlord Primary Health Properties makes new offer for peer Assura
GP landlord Primary Health Properties (PHP) has made a new offer for FTSE 250 healthcare real estate investment trust peer Assura, offering a £1.5bn merger to the REIT.
PHP has offered £1.5bn for the trust, which would see Assura’s shareholders owning about 48 per cent of the combined group’s shares, which would become the eighth largest REIT in the UK.
“The board of PHP believes that a combination of Assura and PHP would deliver significant strategic and financial benefits for both sets of shareholders,” the trust said, noting that it had been trading at a premium rating compared to Assura in recent years.
Last month, an initial PHP offer was rejected by Assura at 43p per share.
The new bid values Assura at 46.2p per share based on the current price of PHP shares, but is still below a 49.4p offer by US private equity giant KKR.
Assura previously rejected four separate takeover attempts for a similar amount from KKR earlier this year, but said it would be “minded to accept” a possible £1.6bn bid from the private equity house.
However, Assura has also indicated the bid from KKR was preferable to any bid from PHP, stating that a cash bid for the firm came with “materially less risk”.
Analysts at Panmure Liberum 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”.
It remains unclear if Assura will accept either bid, given that the 31.9 per cent premium on its share price offered by KKR is significant below the 47 per cent average for UK takeovers last year.
Assura’s stock price has jumped 21 per cent since the start of the year when the bidding war began, and is currently trading at 46.5p per share.
The takeover would be the latest in a series of bids for London-listed companies in 2025, as foreign buyers continue to look to UK capital markets due to low valuations.
Yesterday, data from AJ Bell revealed that there had been almost four times as many takeover bids than IPOs throughout the year.