The bidding war for Assura has swung in favor of private equity group KKR and infrastructure investor Stonepeak Partners after the U.S.-based consortium raised its bid for the British healthcare landlord.
KKR and Stonepeak Partners have made an indicative, non-binding cash offer to acquire the London-listed firm at 49.4 pence per share, according to a Monday filing. The proposal represents a 32% premium to Assura’s share price prior to KKR’s takeover interest becoming public in mid-February.
The new bid, which is a 2.9% increase on KKR’s previous offer of 48 pence per share, has prompted the board of Assura to state that if a firm offer is made on the improved financial terms, it “would be minded to recommend such an offer” to its shareholders
Assura’s board also said that it had decided to engage with the consortium over the latest terms.
KKR’s latest offer values Assura at £1.61 billion ($2.08 billion). The healthcare landlord had rejected four previous approaches from KKR in recent months.
In February, KKR had partnered with pension fund USS Investment Management to make its bid of 48 pence per share that valued the firm at £1.56 billion, which had been rejected by Assura.
“Once again, we have bid situations where the suitor has had to dig deeper into their pockets to try and win over the target’s shareholders,” said Russ Mould, investment director at AJ Bell.
“Increased bids have become a regular occurrence over the past few years as bidders first try their luck with a cheeky offer and then play fair with a higher price a few days, weeks or months later,” he added.
Assura also revealed on Monday that it had rejected a non-binding, all-share merger proposal from Primary Health Properties (PHP) that valued its shares at 43 pence each.
Assura’s board said the cash offer from KKR and Stonepeak was more attractive because it gives shareholders the opportunity to receive “significantly higher value per share than the proposal from PHP and with materially less risk.”
Under British takeover rules, Primary Health has until April 7 to make a firm offer for Assura.
Assura’s shares surged as much as 14% in early trading Monday before paring back the gains.
“The fact Assura’s share price at 46.48 pence is trading below KKR’s latest proposal implies the market doesn’t believe Primary Health Properties is going to come back with a significantly better offer,” Mould said.
He also thinks it suggests skepticism that the new KKR offer is a done deal. The 32% bid premium is significantly below the 47% average for U.K. takeovers in 2024, meaning Assura’s shareholders might feel they aren’t being compensated adequately, according to Mould.
Assura is a property developer and owner of healthcare buildings in the U.K. The Altrincham-based business holds a portfolio of roughly 600 properties, which are mostly general practitioners’ offices and clinics run by the National Health Service (NHS). Assura’s real estate was valued at just over £3.1 billion as of September 2024.
The deal, if completed, is the latest of a series of takeovers by private equity and other firms that are shrinking the U.K.’s stock market. London stocks trade at a discount to New York when priced against expected earnings.
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