PHP makes surprise third offer for Assura at £1.68bn

Primary Health Properties has made a third offer for Assura as the war for the real estate investment trust heats up.

PHP has offered £1.68bn for Assura, valuing its share price at 51.7p – a premium of 38.2 per cent to the company’s closing share price of 37.4 pence on February 13.

This is the third offer PHP has made for Assura.

Assura refused its first offer at 43p per share and second offer at 46.2p per share on the grounds that it wasn’t “at a level that is sufficient to be recommended to shareholders”.

Assura’s board has already unanimously recommended a cash offer at 48.56p per share from KKR and Stonepeak Partners, although the deal has not been finalised.

If Assura decides to accept the PHP offer, its shareholders would own about 48 per cent of the combined group’s shares.

Ninth largest REIT

The company would be the ninth largest UK listed real estate investment trust (REIT) by market cap, with a £6bn portfolio of healthcare real estate.

“The benefits of a combination of PHP and Assura are compelling… [it] enables the shareholders in PHP and Assura to benefit from the rising demand for primary care,” PHP’s chief executive Mark Davies.

Harry Hyman, Non-Executive Chair of PHP, said: “We believe we have reached an inflexion point in the current economic cycle with strong rental growth and lower interest rates enhancing primary care property values and net asset value per share expected to improve.

“Additionally, there has been significant consolidation in the UK real estate sector over the last few years with investors increasingly focused on larger, more scalable REITs with more efficient cost and capital structures, something the combined group is expected to benefit from.

“Given the importance of these social healthcare assets to the public good and the government’s commitment to primary care reform, we also believe PLC ownership provides appropriate stewardship of these assets.”