PHP leads in Assura takeover battle with £1.79bn offer

August 2025 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2025 Issue

Primary Health Properties (PHP) appears to have prevailed over a private equity consortium led by KKR and Stonepeak, securing a £1.79bn all-share-and-cash merger with Assura Group.

The agreement concludes a months-long contest for Assura’s portfolio of 600 healthcare properties, including GP surgeries, pharmacies and treatment centres. Tenants include the UK’s National Health Service.

The KKR-Stonepeak consortium initially proposed an all-cash offer, valuing Assura at approximately 50.42 pence per share after adjusting for dividends, or £1.7bn. However, the bid received minimal shareholder support, with only 0.0084 percent of Assura’s share capital accepting the offer.

PHP countered with a mixed cash-and-stock proposal equivalent to 53.3 pence per share, plus a special dividend of 0.84 pence. Including previously declared dividends, the total value to shareholders rises to 55 pence per share. Under the agreement, Assura shareholders will receive 0.3865 new PHP shares and 12.5 pence in cash per share, in addition to the special dividend. The offer represents a 47 percent premium to Assura’s share price before the offer period began in mid-February.

Beyond financial terms, PHP’s proposal offers strategic advantages by combining two of the UK’s largest healthcare real estate investment trusts (REITs). The merger is expected to create a dominant player in the sector, with increased scale, operational efficiencies and long-term dividend growth potential. PHP, headquartered in London, owns and operates more than 500 primary healthcare sites across the UK.

Assura has recommended the improved offer from PHP and withdrawn its previous endorsement of the KKR consortium’s bid. Shareholders have been advised to take no action regarding the KKR proposal.

PHP will finance the acquisition through a £1.23bn loan facility. The combined group aims to leverage its expanded scale to drive efficiencies and growth in the healthcare real estate sector. Upon completion – subject to shareholder and regulatory approval – Assura shareholders will own approximately 48 percent of the newly merged entity.

“The PHP Board continues to believe in the strong strategic rationale of the Combination, which will create a leading healthcare focussed listed REIT with the scale and expertise to deliver significant benefits for the Shareholders in PHP and Assura,” said Harry Hyman, non-executive chair of PHP. “The Increased PHP Offer, which is expected to deliver earnings accretion to both sets of shareholders, allows Assura Shareholders to participate in significant upside compared to crystalising value in cash at an inflexion point in the current economic cycle, and benefit from the Combined Group’s likely long-term rating, continuing capital growth and a growing dividend. The PHP Board welcomes the recommendation of the Assura Board and, as a significant individual shareholder in PHP, I look forward to the significant value creation potential in the future from the Combined Group.”

“Following recent engagement between PHP and Assura, PHP has today further increased the terms of its offer, and has also addressed some of the potential risks that Assura had previously raised,” said Ed Smith, non-executive chair of Assura. “The Assura Board has always been and will remain resolutely focused on carrying out its fiduciary duties in the interest of Assura Shareholders and in this context has decided to recommend this increased offer from PHP.”

KKR and Stonepeak began discussions regarding a potential acquisition of Assura in early 2025, before submitting a formal £1.7bn all-cash offer in May. Assura’s initial support for this proposal prompted PHP to enter the bidding process. On 23 June, Assura announced it was withdrawing support for the KKR-Stonepeak bid in favour of PHP’s £1.79bn offer. If approved, the transaction is expected to close in the fourth quarter of 2025, with Assura shareholders eligible for PHP’s November dividend.

Richard Summerfield