The takeover tussle for NHS landlord Assura has taken another twist as US private equity giant KKR urged the firm to switch its backing from rival suitor PHP, while the UK competition watchdog stepped in with further action.
A consortium led by KKR has called on Assura’s board to change its recommendation for the £1.79 billion offer from healthcare property firm PHP (Primary Health Properties), arguing the case for its lower cash offer of £1.7 billion.
It came as the UK competition watchdog served an initial enforcement order to block Primary Health Properties from fully integrating Assura while it looks into the deal.
The Competition and Markets Authority (CMA) launched a consultation last month into PHP’s agreed takeover for Assura, in what marked the first step ahead of a formal investigation.
Assura owns more than 600 buildings, including doctors’ surgeries, with a portfolio valued at about £3.1 billion.
It has about 80 employees.
PHP won backing from Assura’s board in June for a £1.79 billion offer following a lengthy bidding war with rival suitor KKR, which has teamed up with US investor Stonepeak for its bid.
PHP increased its offer from an initial £1.68 billion bid in May, having been trumped by KKR and Stonepeak’s £1.7 billion move.
The KKR consortium said on Friday it had held talks with Assura’s board in recent days to urge them to back its bid, saying that “a number of factors have changed” which make PHP’s offer less attractive.
It claims that its cash offer is now 1.1% higher than PHP’s because of a decline in the shares prices of both PHP and Assura in recent weeks.
KKR’s team also claimed that its offer had “no competition or antitrust risk” and is “able to provide the strongest ongoing stewardship for Assura, its team and all stakeholders including investing in NHS infrastructure”.
Assura responded on Friday, saying its board continues to back the PHP offer.
“The Assura directors continue to consider that the terms of the increased PHP offer are in the best interests of Assura shareholders,” the group said.
Assura urged shareholders to accept the PHP offer by the August 12 deadline.
PHP also hit back at KKR’s claims, branding them “false or misleading in an attempt to gain support for its offer”.
It added that the CMA’s latest action was a “planned, conventional and necessary step” in the process.
“The PHP offer is not conditional on CMA approval,” it stressed.
