The battle for acquisition between private equity behemoth KKR and retail investor Primary Health Properties (PHP) has intensified, following KKR's push for Assura to abandon a previously endorsed takeover bid from PHP.
Bidco, KKR's investment vehicle – also backed by US private equity firm Stonepeak – announced on Friday that it has engaged in talks with Assura's board to advocate for its deal, as reported by .
Bidco criticised PHP's "misleading" assertion that the decline in its share price was due to temporary merger arbitrage activity – where certain investors were shorting PHP whilst purchasing Assura shares.
The investment company contended that many of these investors were not shielded against risk and likely to offload PHP shares once they acquire them, exerting additional strain on the company's share price.
On Friday, PHP also encountered pressure as it issued a statement encouraging Assura shareholders to accept its offer. The company revealed that only a small percentage of shareholders had done so thus far and warned that they needed to adhere to a deadline of 12 August.
This deadline aligns with º£½ÇÊÓƵ takeover code stipulations, whereby an offer can only be declared unconditional – meaning PHP has secured sufficient acceptances to finalise the deal – after a 'minimum offer period' which concludes around Day 55 of a proposal.
CMA scrutinises Assura and PHP merger
Bidco stated the Competition and Markets Authority (CMA) was examining a proposed merger between Assura and PHP, given that the transaction involves two significant owners and operators of primary care and community health facilities across the º£½ÇÊÓƵ.
The CMA scrutinises potential transactions that could grant a combined entity excessive market dominance and reduce competition.
Bidco contended the CMA would not examine its proposed acquisition.
The company's "Best and Final Increased Cash Offer" stands at 50.42p per share, which Bidco claimed exceeds PHP's value following recent share price falls.
PHP responded with an enhanced bid for Assura in June at 51.7p per share and committed to reduce Assura's acceptance threshold for the offer whilst bringing forward its quarterly dividend to October.
Assura announced in June that it had advised its board to accept a revised cash proposal from PHP, which valued the company at £1.79bn.
However, analysts cautioned that following Assura's acceptance of the offer, one final development remained in the takeover battle.
"The saga is nearing its conclusion, but isn't done just yet," Oli Creasey, head of property research at Quilter Cheviot, warned.
"We don't think KKR will increase their offer, but they may not have to – another bad morning and PHP's shares would go past the crossover price of 96p.
"Given events to date, further twists and turns could be on the cards," Creasey said.
PHP shares plummeted beneath 96p at the end of July.
