KKR and Stonepeak May Buy Assura for $2.06 Billion

The US-based investment firm KKR has partnered with Stonepeak Partners to make a $2.06 billion bid for UK healthcare property investor Assura, after its previous offer with the UK’s Universities Superannuation Scheme (USS) for $2.01 billion was rejected last month and the USS said that it did not intend to make an offer for Assura, as part of the consortium or otherwise.

The Board of Assura on Monday said that the latest possible cash offer of 49.4 pence per share, which consists of a declared 0.84 pence quarterly dividend and 48.56 pence cash at closing, would likely receive their recommendation to shareholders, subject to the agreement of the other terms of the offer.

The UK-listed Assura is an FTSE 250 company which has several doctors and other non-medical staff working in its 625 healthcare buildings across the UK and Ireland, which are valued around $4.13 billion as of September 2024.

The UK’s healthcare provider also disclosed that it has rejected a non-binding all-share merger proposal from Primary Health Properties (PHP), valued at 43 pence per share but it said that the KKR consortium’s 49.4 pence cash offer was more attractive and therefore rejected the PHP proposal.

“The Board has carefully considered the PHP proposal with its advisers and concluded that the possible cash offer of 49.4 pence in cash 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,” Assura said.

Assets for Sale

It may be recalled that Assura has announced early this month that it was disposing of seven assets for a combined $82.52 million, taking it to $257.87 million of sales since the start of its financial year. The group has been refocusing, acquiring a private hospital portfolio for $644.69 million in August last year, with tenants including Nuffield, Spire and Circle.

AJ Bell analyst Russ Mould said that the higher offer than in February implies that KKR is prepared to do whatever it takes to secure the deal, and the fact Assura’s share price at 46.48 pence is trading below KKR’s latest proposal implies the market doesn’t believe PHP is going to come back with a significantly better offer.”