KKR offer commended by Assura
The heated battle for Assura’s takeover has finally reached a conclusion, with KKR’s bid to take over the healthcare property giant, securing EU approval for the bid if it goes ahead.
Assura accepted private equity giant KKR’s £1.7bn bid, which was made via acquisition vehicle Sana Bidco, last week.
The merger has now received clearance from the European Commission.
It will see yet another company leave the London Stock exchange amid a mass exodus of listed firms as international giants seize cheap British assets.
The KKR and Stonepeak-owned acquisition vehicle has faced tough competition from Primary Health Properties, with the two locked in a bidding war since Februrary.
The competition between the two companies for Assura, which owns GP surgeries across the UK, has pushed up the offer price from £1.56bn to KKR’s “best and final” offer of £1.7bn.
Despite KKR’s now-successful offer, Assura’s major shareholders still aren’t happy with the deal: Quilter Cheviot and Schroders, which own around 6 per cent and 5 per cent of shares in the NHS landlord respectively, have said they favour PHP over KKR.
Allianz, Gravis and Baillie Gifford have also supported PHP, arguing that it undervalues Assura.
Last week, PHP “strongly advised” Assura shareholders to take no action in response to KKR’s offer, arguing that a PHP-Assura tie-up represents a “highly compelling proposition”.
“This is underpinned by the Board’s belief that the sector is at an inflexion point in the current economic cycle with strong rental growth and lower interest rates enhancing primary care property values and with net asset values per share expected to continue to improve,” the company said.
PHP even attempted to sweeten its deal by lowering Assura’s acceptance conditions and pledging to accelerate its quarterly dividend in October.
Assura’s share price has been steadily climbing as the bidding war has dragged on, up more than 33 per cent since February.