REG - Assura plc Primary Health Props - Recommended Best and Final* Increased Cash Offer

Primary Health PropertiesAnnouncement

11/06/2025 07:10

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250611:nRSK3640Ma&default-theme=true

RNS Number : 3640M  Assura PLC  11 June 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

FOR IMMEDIATE RELEASE

 

11 June 2025

 

 

Assura plc ("Assura")

 

Recommended Best and Final* Increased Cash Offer from Sana Bidco Limited

 

Background

 

On 9 April 2025, the boards of Sana Bidco Limited ("Bidco") and Assura
announced that they had reached an agreement on the terms of a recommended
cash offer for the entire issued and to be issued ordinary share capital of
Assura by Bidco, to be effected by means of a scheme of arrangement under Part
26 of the Companies Act 2006. Bidco is a newly formed company indirectly
wholly owned by (i) funds advised by Kohlberg Kravis Roberts & Co. L.P.
and its affiliates ("KKR") and (ii) funds advised by Stonepeak Partners LP and
its affiliates ("Stonepeak").

 

On 16 May 2025, Primary Health Properties plc ("PHP") announced its firm
intention to make a share and cash offer for the entire issued and to be
issued ordinary share capital of Assura (the "PHP Offer") under Rule 2.7 of
the Takeover Code. On 23 May 2025, Assura announced that it had commenced due
diligence in relation to PHP to determine whether to recommend the PHP Offer
to Assura Shareholders and, as a result, had decided to adjourn the Court
Meeting and the General Meeting (the "Meetings") required to implement the
Cash Offer from Bidco. On 6 June 2025, Assura subsequently announced that the
Meetings had been formally adjourned until further notice.

 

Assura now confirms that the boards of Bidco and Assura have reached agreement
on the terms of a recommended best and final* increased cash offer (the "Best
and Final* Increased Cash Offer") for the entire issued and to be issued
ordinary share capital of Assura.

 

Recommended Best and Final* Increased Cash Offer from Sana Bidco Limited

 

Under the terms of the Best and Final* Increased Cash Offer, Assura
Shareholders will be entitled to receive 50.42 pence in cash (the "Cash
Consideration"). In addition, Assura Shareholders:

 

·     retained the quarterly interim dividend of 0.84 pence announced on
18 February 2025 and which was paid on 9 April 2025 (the "April Dividend");
and

 

·     will retain the quarterly interim dividend of 0.84 pence announced on
19 May 2025 and which will be paid on 9 July 2025 (the "July Dividend" and,
together with the April Dividend, the "Declared Dividends").

 

The Best and Final* Increased Cash Offer therefore implies a total value of
52.1 pence for each Assura Share, inclusive of the Declared Dividends, and
values the entire issued and to be issued ordinary share capital of Assura at
approximately £1,696 million on a fully diluted basis. The Best and Final*
Increased Cash Offer represents a premium to Assura's EPRA NTA per Assura
Share of 50.4 pence as at 31 March 2025.

 

* The financial terms of the Best and Final* Increased Cash Offer are final
and will not be increased, except that Bidco reserves the right to increase
the financial terms of its offer where the Panel otherwise provides its
consent (which will only be provided in wholly exceptional circumstances).

 

The Best and Final* Increased Cash Offer together with the Declared Dividends
represents a premium of approximately:

 

·    39.2 per cent. to the Closing Price of 37.4 pence per Assura Share on
13 February 2025, being the last Business Day prior the commencement of the
Offer Period on 14 February 2025;

 

·   41.2 per cent. to the volume weighted average price of 36.9 pence per
Assura Share for the one-month period ended 13 February 2025; and

 

·     37.7 per cent. to the volume weighted average price of 37.8 pence per
Assura Share for the three-month period ended 13 February 2025.

 

Ed Smith, Non-Executive Chair of Assura, commented:

 

"The Board's decision to recommend the offer from KKR and Stonepeak follows a
careful and thorough evaluation of both offers, during which the Board has
been firmly focused on its fiduciary duty to shareholders. 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."

 

Bidco has confirmed that the Best and Final* Increased Cash Offer is to be
effected by way of a takeover offer (as defined in section 974 of the
Companies Act) and requires as a condition that acceptances are received by
Bidco in respect of, or Bidco otherwise acquires or unconditionally contracts
to acquire, more than 50 per cent. of the Assura Shares subject to the Best
and Final* Increased Cash Offer. The Assura Board believes that Bidco's
decision to switch to the Takeover Offer (with the consent of Assura and the
Takeover Panel) provides greater certainty for Assura Shareholders.

 

Assura has been notified by Bidco that clearances from the State
Administration for Market Regulation of the People's Republic of China, the
Israeli Competition Authority and the Korea Fair Trade Commission have been
received. Accordingly, conditions 3(a), 3(c) and 3(d) set out in Part A of
Part 3 of the Scheme Document have been satisfied. Bidco is expected to have
obtained all necessary clearances in respect of the Best and Final* Increased
Cash Offer by the end of June 2025.

 

Recommendation

 

The Assura Directors, who have been so advised by Lazard as to the financial
terms of the Best and Final* Increased Cash Offer, consider the terms of the
Best and Final* Increased Cash Offer to be fair and reasonable. In providing
their advice to the Assura Directors, Lazard have taken into account the
commercial assessments of the Assura Directors. Lazard is providing
independent financial advice to the Assura Directors for the purposes of Rule
3 of the Takeover Code.

 

The Assura Directors consider that the terms of the Best and Final* Increased
Cash Offer are in the best interests of Assura Shareholders as a whole.
Accordingly, the Assura Directors intend to unanimously recommend that the
Assura Shareholders accept, or procure the acceptance of, the Best and Final*
Increased Cash Offer as the Assura Directors who hold interests in Assura
Shares have irrevocably undertaken to do in respect of their own legal and/or
beneficial holdings over which they have control, being in aggregate 4,638,828
Assura Shares (representing approximately 0.1 per cent. of the existing issued
ordinary share capital of Assura) as at 10 June 2025 (being the last Business
Day before the date of this Announcement).

 

Further details of the relevant background to the Assura Board's intended
recommendation are set out in the section entitled "Background to and reasons
for the recommendation" in Part 1 of the Scheme Document. The Assura Board
believes that the Best and Final* Increased Cash Offer represents a compelling
opportunity for Assura Shareholders to achieve a significant realisation of
their investment in Assura at a higher value, and at materially less risk,
than the PHP Offer, as set out below.

 

In the light of its recommendation that Assura Shareholders accept the Best
and Final* Increased Cash Offer, the Assura Board is not recommending the PHP
Offer and advises Assura Shareholders to take no action in relation to the PHP
Offer.

 

The PHP Offer

 

Following the PHP Offer of 16 May 2025, Assura has undertaken several weeks of
detailed due diligence and consultation with PHP and its advisers. The Assura
Board has concluded that the PHP Offer presents material risks and downsides
to Assura Shareholders which undermine the potential benefits of the proposed
combination under the PHP Offer:

 

·    Financial risk: The cash element of the PHP Offer would result in a
level of leverage significantly exceeding the target loan-to-value ratios of
both Assura and PHP. In addition, the combined group would face approximately
£2 billion of refinancing obligations over the next two to three years
arising from the acquisition facilities and the near-term maturities of
existing in-place debt across both Assura and PHP. The increased leverage and
these near-term maturities expose Assura Shareholders to adverse changes in
financing costs which could negatively affect the earnings profile of the
combined group.

 

·    Execution risk: The Assura Board notes the intention of PHP to reduce
leverage of the combined group through asset disposals, including that of
Assura's portfolio of UK private hospitals. The Assura Board, with the benefit
of its experience in conducting disposals and knowledge of the relevant
private hospital market, has considered this plan in detail and is concerned
about the execution risk associated with the required size and timing of these
disposals and the acceptability of the terms that might be available to the
combined group especially under the PHP stated joint venture disposal
structure.

 

·     Reduced exposure to long-dated, inflation-linked leases: Following
Assura's successful strategic pivot towards becoming a more diversified
healthcare REIT investing in a range of healthcare assets, Assura's and PHP's
strategies have diverged. While Assura has diversified its portfolio by
expanding into the private healthcare market, targeting longer-term,
inflation-linked leases, PHP has remained focused on public sector surgery
properties. A combination with PHP, together with the planned disposals of
Assura's private hospital assets, would significantly dilute Assura
Shareholders' exposure to private healthcare assets, the majority of which
benefit from long-dated inflation-linked leases which provide greater
certainty of rental growth than OMR leases. The portfolio of the combined
group would be more weighted towards shorter length (on average) OMR leases,
which have historically seen lower rental growth than inflation.

 

·   Impact on Assura asset quality, growth prospects and ability to support
the NHS: The limitations placed on the combined group by its elevated leverage
and by the need to undertake significant asset disposals would, the Assura
Board believes, restrict both investment and development expenditure, as well
as reduce Assura's ability to maintain, upgrade and modernise its older assets
with the consequential impact on earnings growth of the combined group. As
such, the Assura Board believes that the PHP Offer would impact the ability of
the combined business to support the NHS in respect of the assets it needs in
order to deliver critical services to its patients.

 

·      Integration risks: The Assura Board has considered the risks and
implications of undertaking significant portfolio disposals and refinancing
activities at the same time as integrating the two businesses to deliver PHP's
estimated annualised run-rate cost synergies of approximately £9 million. The
Assura Board believes these concurrent activities would introduce heightened
execution risk and operational disruption with corresponding financial
uncertainty. Finally, while the Assura Board notes that CMA clearance is not a
condition of the PHP Offer, Assura Shareholders would still bear a risk in
this regard as an extended review would risk delaying PHP's disposal
programme.

 

The Assura Board believes that Bidco's Best and Final* Increased Cash Offer
provides the certainty of cash today to Assura Shareholders, alongside
long-term capital to fund significant investment in the UK's healthcare
infrastructure and support investments in the NHS estate.

 

Timetable

 

It is anticipated that Bidco will publish and post the Offer Document
(together with a form of acceptance) (where applicable) to Assura Shareholders
(other than Assura Shareholders located in any Restricted Jurisdictions, in
each case, where to do so would violate the laws of that jurisdiction) within
28 days of the date of this Announcement, or such later date as the Panel may
determine in accordance with the Takeover Code.

 

Further details of the expected timetable will be set out in the Offer
Document, together with instructions regarding how Assura Shareholders can
accept the Best and Final* Increased Cash Offer.

 

This Announcement has been made with the consent of Bidco and without the
consent of PHP.

 

Enquiries:

 

Assura plc
 
                 0161 515 2043

Ed Smith

Jonathan Murphy

Jayne Cottam

 

Lazard (Lead Financial Adviser to Assura)
                                           020 7187
2000

Cyrus Kapadia

Patrick Long

Caitlin Martin

 

Barclays (Joint Corporate Broker and Financial Adviser to Assura)
            020 7623 2323

Bronson Albery

Callum West

Ronak Shah

 

Stifel (Joint Corporate Broker and Financial Adviser to Assura)
                 020 7710 7600

Mark Young

Jonathan Wilkes-Green

Catriona Neville

 

FGS Global (PR Adviser to Assura)
 
      020 7251 3801

Gordon Simpson

Grace Whelan

Travers Smith LLP is acting as legal adviser to Assura in connection with the
Best and Final* Increased Cash Offer.

Interpretation

Capitalised terms in this Announcement, unless otherwise defined, have the
same meaning as set out in the Scheme Document, a copy of which is available
on Assura's website at
https://www.assuraplc.com/investor-relations/shareholder-information/offer-from-kkr-and-stonepeak.

Important Notices

Lazard and Stifel, which are each separately authorised and regulated in the
United Kingdom by the FCA and Barclays which is authorised by the PRA and
regulated in the United Kingdom by the FCA and the PRA, are acting exclusively
as lead financial adviser, joint corporate broker and financial adviser, and
joint corporate broker and financial adviser, respectively, to Assura and no
one else in connection with the Best and Final* Increased Cash Offer and will
not be responsible to anyone other than Assura for providing the protections
afforded to clients of Lazard or Barclays or Stifel, as relevant, nor for
providing advice in relation to the Best and Final* Increased Cash Offer or
any other matters referred to in this Announcement. None of Lazard, Barclays
or Stifel or any of their respective affiliates (nor any of their respective
directors, officers, employees or agents), owes or accepts any duty, liability
or responsibility whatsoever (whether direct or indirect, whether in contract,
in tort, under statute or otherwise) to any person who is not a client of
theirs in connection with this Announcement, any statement contained herein or
otherwise.

 

In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the Exchange Act, Barclays and its affiliates will continue to act
as exempt principal trader in Assura plc on the London Stock Exchange. These
purchases and activities by exempt principal traders which are required to be
made public in the United Kingdom pursuant to the Code will be reported to a
Regulatory Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com. This information will also be
publicly disclosed in the United States to the extent that such information is
made public in the United Kingdom.

 

Disclosure Requirements of the Code

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror, save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129.

 

Further Information

 

This Announcement is for information purposes only and does not constitute an
offer or inducement to sell or an invitation to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of, any securities or a solicitation
of an offer to buy any securities, pursuant to the Best and Final* Increased
Cash Offer or otherwise. The Best and Final* Increased Cash Offer shall be
made solely by means of the Offer Document (or, if the Best and Final*
Increased Cash Offer is implemented by way of a Scheme, the Scheme Document)
which shall contain the full terms and Conditions of the Best and Final*
Increased Cash Offer, including details of how to accept the Best and Final*
Increased Cash Offer.

 

This Announcement has been prepared for the purpose of complying with English
law, the Listing Rules, the JSE Listings Requirements and the Takeover Code
and the information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance with the
laws of jurisdictions outside of England.

 

This Announcement does not constitute a prospectus, prospectus equivalent
document or an exempted document for purposes of English law, the Listing
Rules, the JSE Listings Requirements or any other law in any other
jurisdiction.

 

Inside Information

 

This Announcement contains inside information as defined in the UK version of
the Market Abuse Regulation (EU) No.596/2014, which is part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the
publication of this Announcement via a Regulatory Information Service, such
inside information will be considered to be in the public domain. For the
purposes of MAR, this announcement is being made on behalf of Assura by Orla
Ball, Company Secretary.

 

Bases and sources

 

In this Announcement, unless otherwise stated or the context otherwise
requires, the following bases and sources have been used:

 

·     references to the issued, and to be issued, ordinary share capital of
Assura are based on (i) the 3,250,608,887 ordinary Assura Shares in issue on
the Business Day prior to this Announcement, and (ii) the 5,131,752 Assura
Shares that may be issued pursuant to the Assura Share Plans as described in
the Scheme Document;

·      unless otherwise stated, all prices quoted for Assura Shares are
Closing Prices;

·      share price and volume weighted average share price data is
derived from FactSet and Bloomberg;

·     details regarding PHP's financing arrangements, loan-to-value ratios
and synergy estimates have been derived from PHP's announcement dated 16 May
2025;

·     financial information relating to PHP is extracted from the audited
financial results for the year ended 31 December 2024, released on 28 February
2025;

·     financial information relating to Assura is extracted from the
unaudited financial results for the six months ended 30 September 2024,
released on 14 November 2024 and the trading update for the year ended 31
March 2025, released on 14 May 2025;

·     financial information relating to refinancing obligations is
extracted from PHP audited financial results for the year ended 31 December
2024, released on 28 February 2025 and unaudited financial results for the six
months ended 30 September 2024, released on 14 November 2024; and

·      certain figures included in this Announcement have been subject
to rounding adjustments.

Rule 26.1 Disclosure

 

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be
available (subject to certain restrictions relating to persons resident in
restricted jurisdictions) on Assura's website at
www.assuraplc.com/investor-relations/shareholder-information by no later than
12 noon (London time) on the business day following the date of this
Announcement.

 

For the avoidance of doubt, the content of the website referred to in this
Announcement is not incorporated into, and does not form part of, this
Announcement.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  OFBGPUCUQUPAUQG