Assura switches support to accept PHP’s increased offer

Assura has accepted an increased offer from Primary Health Properties (PHP), which stands at a 5.8% premium to a £1.7bn (€2bn) improved and final offer from KKR and Stonepeak Partners earlier this month.

PHP and Assura said they have agreed to the terms of a recommended combination which will be implemented through an increased shares and cash offer, under which PHP will acquire all issued and to be issued ordinary share capital of fellow UK healthcare property firm Assura.

The deal involves Assura shareholders receiving 0.3865 new PHP shares for each share they hold, in addition to 12.5p in cash as well as a special dividend of 0.84p per Assura share.

The deal values each Assura share at 53.3p, compared with the best and final cash offer of 50.42p that had been submitted by KKR and Stonepeak.

Assura said it has decided to recommend the increased offer from PHP. As a result, the board has withdrawn its previous recommendation for the final offer from the KKR consortium and advises Assura shareholders to take no action regarding the KKR consortium’s offer.

Harry Hyman, non-executive chair of PHP, said: “The PHP board continues to believe in the strong strategic rationale of the combination, which will create a leading healthcare-focused listed REIT with the scale and expertise to deliver significant benefits for the shareholders in PHP and Assura.

“The increased PHP offer, which is expected to deliver earnings accretion to both sets of shareholders, allows Assura shareholders to participate in significant upside compared to crystallising value in cash at an inflection point in the current economic cycle, and benefit from the combined group’s likely long-term rating, continuing capital growth and a growing dividend.”

Ed Smith, non-executive chair of Assura, said: “Following recent engagement between PHP and Assura, PHP has today further increased the terms of its offer, and has also addressed some of the potential risks that Assura had previously raised.

“The Assura board has always been and will remain resolutely focused on carrying out its fiduciary duties in the interest of Assura shareholders and in this context has decided to recommend this increased offer from PHP.”

London-listed Assura, designs, builds, invests in and manages general practitioner and primary-care buildings in the UK. As of the third quarter of last year, the company owned 625 healthcare buildings in the UK and Ireland, valued at £3.2bn.

The latest development for Assura, with PHP’s increased offer being recommended by Assura’s board, follows a lengthy bidding war. For months, Assura has been at the centre of an acquisition battle, with various proposals from both PHP and a KKR consortium. Offers had been revised and rejected in the contest to secure control of the UK-listed healthcare property firm.

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