KKR urges Assura to reconsider PHP offer as CMA begins phase 1 probe

(Sharecast News) - The Assura takeover saga continued on Friday as private equity firm KKR released a statement urging the NHS landlord to reconsider its decision to accept a £1.79bn takeover offer from Primary Health Properties. KKR said that since the board's recommendation of the revised PHP offer, a number of factors have reduced its attractiveness.

KKR said it has engaged with Assura's board over the last few days to request that it change its recommendation in favour of the private equity firm.

It said its offer delivers a higher monetary value, full certainty and risk-free value in the form of cash, no execution risk in relation to asset sales required to reduce the over-leverage of the combined PHP-Assura entity, and no competition or antitrust risk.

It pointed to the fact the Competition and Markets Authority has an ongoing inquiry into Assura's acquisition by PHP.

"Bidco is able to provide the strongest ongoing stewardship for Assura, its team and all stakeholders including investing in NHS infrastructure," KKR said.

On price alone, it said, its best and final cash offer is 1.1% higher than the revised PHP offer after a drop in the share prices of both Assura and PHP since their deal was recommended.

The PE firm pointed out that Assura's share price has fallen over the last few days. On Thursday, it closed at 48.98p, meaning that KKR's current 50.42p per share offer represents a 2.9% premium to the share price.

"Despite this, there appears to have been no buying activity from investors who have expressed support to the potential combination of PHP and Assura and who therefore should see this as an opportunity to buy into Assura at a depressed valuation," KKR said.

"Given this, it is unclear where further buying support for the potential combined entity could come from, if the revised PHP offer is successful."

The statement from KKR came as the CMA said on Friday that it has decided to investigate PHP's takeover of Assura to see whether it will lead to a "substantial lessening" of competition.