Private equity firms KKR and Stonepeak Partners on Wednesday raised their all-cash takeover offer for Altrincham-based healthcare real estate investment trust Assura to almost £1.7 billion, topping a rival bid with their “best and final” offer.
The 52.1p a share offer, including dividends, trumps the 51.7p per share in shares and cash proposed by rival suitor Primary Health Properties (PHP).
The KKR-Stonepeak proposal represents a more than 39% premium to Assura’s closing price on February 13, the day before KKR and Stonepeak’s first approach.
Assura on Wednesday said PHP’s offer poses “material risks and downsides” for its shareholders and that it recommends accepting KKR-Stonepeak’s improved proposal.
PHP then said it “strongly disagrees” with Assura’s evaluation of its bid and is reviewing its options.
Assura chair Ed Smith said: “The Board’s decision to recommend the offer from KKR and Stonepeak follows a careful and thorough evaluation of both offers, during which the Board has been firmly focused on its fiduciary duty to shareholders.
“KKR and Stonepeak are highly experienced investors in healthcare and infrastructure and I am confident that with their support, and the additional capital they will provide, Assura will continue to deliver the high-quality healthcare infrastructure our communities need.”
Andrew Furze, Managing Director at KKR, said: “After nearly a year of engagement, this is our best and final offer which we believe is lower risk than other alternatives and higher in value offering a significant premium. We require no disposals to achieve our ambition and importantly the all cash offer poses minimal execution risk.”
Nikolaus Woloszczuk, Senior Managing Director at Stonepeak, said: “We firmly believe Assura has a brighter future in the private markets.
“Our final offer equips Assura with the long-term capital it has not been able to access as a listed business and will enable the company to invest in upgrading critical healthcare infrastructure, delivering improved outcomes for the NHS. Our offer is about growth, not about cost cutting and disposals.”
PHP said: “The Board of PHP strongly disagrees with the Assura Board’s assessment and will set out its detailed views in due course.
“The Board of PHP considers the Government’s spending review for the next three years announced earlier today as positive for both the PHP and Assura businesses, with a 3 per cent. per annum increase to the NHS day-to-day budget, in real terms, equivalent to approximately £29 billion per year of additional funding.
“Furthermore, the Board of PHP expects the upcoming 10-year plan on healthcare to be equally positive and to provide a boost to primary care as the Government shifts toward community, primary and preventive care in the future.
“PHP is considering its options and a further announcement will be made when appropriate.
“Assura shareholders are strongly advised to take no action in response to the announcement by Bidco in the meantime.”