US private equity giant KKR outbids rival with £1.7bn offer for Assura

NHS landlord Assura has backed a takeover bid from US private equity giant KKR after raising its offer to £1.7 billion.

Assura said it had reached an agreement on a “best and final” bid led by Kohlberg Kravis Roberts (KKR) and Stonepeak Partners.

The medical property firm sparked a bidding war when it said it had agreed to be bought by the consortium back in April for a takeover price of £1.61 billion.

But healthcare investor Primary Health Properties (PHP) then swooped in with a higher bid worth £1.68 billion, saying its offer was “compelling”.

Both bidders have upped their offers several times to try and clinch a deal.

Assura owns more than 600 buildings, including doctors’ surgeries, with a portfolio valued at around £3.1 billion. It has about 80 members of staff.

The improved bid from KKR and Stonepeak offers 52.1p for each Assura share – valuing the entire company at about £1.7 billion.

Assura said it was recommending the offer to shareholders and advised that they “take no action” in relation to PHP’s approach.

Ed Smith, Assura’s chairman, said the decision followed a “careful and thorough evaluation of both offers”.

“KKR and Stonepeak are highly experienced investors in healthcare and infrastructure and I am confident that with their support, and the additional capital they will provide, Assura will continue to deliver the high-quality healthcare infrastructure our communities need,” he said.

KKR has been under the spotlight recently for pulling out of a possible rescue deal to inject much-needed cash into Thames Water, Britain’s biggest water supplier.

Thames had chosen KKR at the end of March to be its preferred bidder under plans to invest around £4 billion of new equity to help keep the financially stricken company afloat.

But Thames Water said KKR was not “in a position to proceed” with any offer.