Assura 'minded to recommend' improved takeover proposal from KKR, Stonepeak

(Sharecast News) - Assura said on Monday that it was "minded to recommend" an improved, £1.61bn cash takeover proposal from investment firms KKR and Stonepeak. The consortium has offered 49.4p per share, which is 2.9% increase on the previous proposal of 48p per share.

Assura said: "Having carefully considered the possible cash offer with its advisers and consulted with the company's major shareholders extensively following the announcement of a possible offer on 14 February 2025, the board has indicated to the consortium that, should a firm offer be made on the financial terms set out above, it would be minded to recommend such an offer to Assura shareholders, subject to the agreement of the other terms of the offer."

As a result, the board has decided to engage in talks with the consortium and allow it to complete a limited period of confirmatory due diligence.

Assura also said that it has received an indicative, non-binding proposal from Primary Health Properties about a possible all-share combination, which it has rejected.

This would be structured by way of an offer by PHP for Assura at an exchange ratio based on each company's last reported NTA per share. Based on PHP's share price of 90.1p as at 13 February, the implied value of the PHP proposal is 43p per Assura share.

Assura said the cash offer from KKR is more attractive than the PHP proposal "as it provides shareholders with the opportunity to receive cash consideration at a significantly higher value per share than the proposal from PHP and with materially less risk".

Under UK takeover rules, PHP has until the end of play on 7 April to either announce a firm intention to make an offer or walk away.

At 1410 GMT, Assura shares were up 14.3% at 46.56p.

Russ Mould, investment director at AJ Bell, said:" Doctors' surgeries property owner Assura has found itself the subject of a bidding war. Private equity group KKR had already submitted four separate proposals to buy the group, including a 48p per share deal on 13 February. That's now been bumped even higher to 48.56p and the right to keep a planned dividend in April, implying that KKR is prepared to do whatever it takes to secure the deal.

"A second party throwing their hat into the ring makes things interesting. Primary Health Properties has also proposed a merger with Assura, but the target has rejected the proposal on the grounds that KKR's cash offer is more attractive than an all-share deal. KKR's bid is also higher than the implied 43p per share PHP merger value as of 13 February.

"The fact Assura's share price at 46.48p 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. It also suggests scepticism that the new KKR proposal is a done deal. The 31.9% bid premium is significantly below the 47% average for UK takeovers in 2024, meaning Assura's shareholders might feel they aren't being compensated adequately. After all, they would be giving up an investment that could generate much greater returns over time."