The board of Assura has recommended the offer for the company from Primary Health Properties (PHP), switching from its previous recommendation for the KKR/Stonepeak bid.
Under the terms of the increased PHP offer, Assura shareholders would receive 0.3865 new PHP shares and 12.5p in cash. In addition, Assura shareholders would receive a special dividend of 0.84p.
The offer, together with the special dividend implies a total value of 55.0p and values Assura’s entire issued and to be issued ordinary share capital at around £1.79bn.
This represents an increase of 2.2% to the value of PHP’s previous share and cash offer, a premium of 47.1% to Assura’s closing share price of 37.4p on 13 February 2025 (when the offer period started) and a 9.1% premium to Assura’s NAV.
It is also a 9.1% premium to KKR/Stonepeak’s best and final cash offer of 50.42p.
Subject to acceptance of the PHP offer (which needs 50% approval from shareholders), following completion of the combination Assura shareholders would hold around 48% of the combined group’s issued share capital.
Commenting on the 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 focussed 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 crystalising value in cash at an inflexion point in the current economic cycle, and benefit from the Combined Group’s likely long-term rating, continuing capital growth and a growing dividend.
“The PHP Board welcomes the recommendation of the Assura Board and, as a significant individual shareholder in PHP, I look forward to the significant value creation potential in the future from the Combined Group.”
Ed Smith, chair of Assura, added: “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.”
[QD comment: The bidding war for Assura has seen the offer price increase from 48.0p to 55.0p. This is a great result for shareholders, especially given that many real estate and real assets companies have been taken out by private equity at discounts to NAVs. Many Assura shareholders were pushing for the merger with PHP over the cash offer from KKR, recognising the potential for valuation uplifts (with the sector just emerging from the bottom of the market) and the promising structural dynamics at play in the healthcare sector. There still remains executive risk, however, with the combined group having an enlarged debt pile (over 50% LTV) that will require a large number of disposals to bring it down to PHP’s target range of 40%-50%.]
How to accept the Increased PHP Offer
Assura shareholders who have already accepted the original offer from KKR will automatically be deemed to have accepted the increased PHP offer, by virtue of their prior acceptance and do not need to take any further action.
Assura shareholders holding shares in certificated form (not in CREST) who wish to accept the offer should complete either the first form of acceptance and election accompanying the original offer document dated 13 June 2025 or the second form of acceptance and election which will accompany the revised offer document to be posted in due course.
Shareholders holding shares in uncertificated form (in CREST) who wish to accept the offer should do so electronically through CREST.
Shareholders who have not yet accepted the PHP offer are urged to do so as soon as possible and by no later than 1pm on 12 August 2025.
