NHS landlord Assura agrees £1.6bn takeover by investment consortium

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Assura Accepts £1.6 Billion Takeover Bid from Investment Consortium

London, UK – Assura, a prominent UK healthcare property company and NHS landlord, has agreed to a £1.6 billion acquisition offer from investment giants Kohlberg Kravis Roberts (KKR) and Stonepeak Partners. The deal marks a significant development in the UK healthcare infrastructure sector, highlighting the attractiveness of primary care real estate.

Takeover Agreement Reached

The Altrincham-based firm, which possesses a portfolio of over 600 properties across the United Kingdom, specializing in GP surgeries and healthcare facilities, has been the center of a competitive bidding process.

The accepted proposal sets the value of each Assura share at 49.4 pence. This represents a substantial 32 percent increase compared to the company’s share price at market close on the last trading day before the offer period commenced.

Under the terms of the agreement, Assura shareholders are set to receive a dividend of 0.84 pence per share, in addition to 48.56 pence in cash for each share held.

Board’s Recommendation and Previous Offer

Assura’s leadership team has indicated they are ‘minded to recommend’ the offer from KKR and Stonepeak to its shareholders, contingent upon the submission of a firm bid on the agreed financial terms.

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This acceptance follows the rejection of a prior, lower bid of £1.5 billion from Primary Health Properties (PHP), a real estate investment trust also focused on healthcare properties.

Strategic Rationale for Acquisition

Ed Smith, Chairman of Assura, commented on the agreement, stating, ‘The cash offer from KKR and Stonepeak allows Assura shareholders to realize their investment at an attractive valuation.’

He further added, ‘With the advantage of the extra capital that KKR and Stonepeak can supply, Assura will be equipped to continue its support for the NHS and other healthcare providers in their goal to achieve enhanced health outcomes.’

KKR and Stonepeak’s Perspective

KKR and Stonepeak have stated that Assura’s property holdings are well-aligned with the UK Government’s strategic objectives to shift more healthcare services towards primary and community care settings.

The investment group also believes that Assura’s current status as a publicly listed company, along with its existing capital structure, restricts its expansion potential. They contend that private ownership would ‘expedite the delivery’ of new, modern healthcare buildings.

Tara Davies, Co-head of European Infrastructure at KKR, remarked, ‘Assura is a market leader in healthcare infrastructure, and we are aligned with the company’s aim of constructing superior facilities to underpin the provision of national healthcare objectives.’

Davies continued, ‘To achieve this effectively necessitates substantial investment in Assura’s platform, a long-term outlook, and the capability to finance Assura’s growth through enduring and adaptable capital.’

Market Reaction and Wider Context

Assura shares experienced a surge on Wednesday morning, becoming the top performer on the FTSE 250 Index, with shares climbing 5.1 percent to 47.5 pence.

This prospective takeover is part of a broader trend of increased acquisition activity, where international investors are acquiring UK-listed businesses, perceived as undervalued.

Recent examples of firms acquired by overseas entities include supermarket giant Morrisons, cybersecurity firm Darktrace, and packaging corporation DS Smith.

KKR’s recent acquisitions also include infrastructure investors John Laing and Smart Metering Systems, as well as satellite software business IQGeo Group.