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NHS landlord Assura has reached a £1.6bn deal to sell itself to a private capital consortium that includes KKR, rejecting a rival bid that would have kept the company in the UK market.
The board of the FTSE 250 group, which owns hundreds of UK doctors’ surgeries and healthcare centres, on Wednesday said it had recommended an all-cash offer of 49.4p per share from KKR and infrastructure specialist Stonepeak Partners.
The £1.6bn bid beat out a £1.5bn cash-and-shares deal from listed rival Primary Health Partners, which the board rejected on Wednesday.
“Against the backdrop of shifting demographic and structural trends, KKR and Stonepeak believe that Assura has a crucial and growing role to play in the provision of critical healthcare infrastructure,” the companies said in a statement.
They added that private ownership would allow Assura “to make sustained capital investments without the need for asset sales”.
The offer represents a 32 per cent premium to Assura’s share price before the bidding went public in February. The company’s portfolio was independently valued at £3.2bn in September.
PHP sweetened its offer earlier this month to include a higher cash portion. It argued that despite the lower value of its bid, shareholders would benefit from long-term growth and income if the company stayed in the public markets as part of a combined group.
The Assura deal marks KKR’s latest move on a business involved in the provision of public services in the UK. The US private equity group was named last month as the preferred bidder for Thames Water, the heavily indebted water utility that services 16mn people across London and the Thames Valley. KRR also owns a 25 per cent stake in Northumbrian Water.
Assura joins a growing list of UK-listed landlords — including Industrials Reit and Tritax EuroBox — that have been taken private in recent years as real estate suffered through a sharp downturn caused by higher interest rates. Many real estate groups trade at big discounts to the book value of their assets.
The deal is subject to shareholder approval and is expected to complete by the autumn.
