Assura shareholders vote for PHP deal

Primary Health Properties’ £1.8bn offer for the Altrincham-headquartered healthcare landlord has become unconditional, defeating a rival bid from a KKR-led consortium.

The announcement yesterday that 63% of Assura shareholders had voted for the PHP offer brings to a close a bidding war stretching back to the early months of this year. A document detailing the lapse of KKR’s takeover offer has also been issued.

All that remains is for the Competition & Markets Authority to clear the deal, having set in motion an investigation into whether or not the merger could “result in a substantial lessening of competition”.

Assura has built up a portfolio of around 600 GP surgeries and other medical facilities, and in more recent times has refocused, investing £500m in private hospitals a year ago.

The early stages of bidding saw a consortium formed of private equity powerhouse KKR and Stonepeak Partners become favourite with a £1.6bn offer in March, but by mid-May PHP’S third bid had nudged the price up to £1.68bn and kept the process alive.

By 23 June, PHP’s final cash and shares offer had become the preferred route forward for the Assura board, which recommended shareholders approve it. That offer is now unconditional in all respects.

A special dividend of 0.84 pence per Assura share which was declared by Assura, depending on the revised offer becoming unconditional, has thus been paid to all Assura shareholders.

Assura’s closing share price on 13 February, the last day before the offer period was opened, was 37.4 pence. The PHP offer, factoring in all dividends, reflects a 47.1% premium on that.

As reported by Place in June, the cash consideration payable by PHP will be funded by an unsecured loan to be made available through a facilities agreement with Citibank, RBS, and Lloyds Bank, with a total aggregate commitment of £1.225bn.

Rothschild & Co, Deutsche Numis, Citi and Peel Hunt advised PHP. Lazard, Barclays Bank and Stifel Nicolaus advised Assura.

CMS worked on legals for PHP, with Travers Smith representing Assura.