Battle for Assura Intensifies as UK Shareholders Reject Takeover Bid for MidSized Health Firm

The £1.7 billion takeover scramble for Assura, Britain’s prominent primary healthcare property firm, has taken a heated turn. Major UK shareholders have openly rejected an acquisition attempt led by US private equity giant KKR, urging the board to instead explore a merger with its London-listed rival, Primary Health Properties (PHP).

These shareholders argue that a merger would maintain the company’s presence on the UK stock exchange, keeping investment opportunities accessible to domestic investors while capitalising on future growth and economies of scale.

Schroders, Aberdeen Investments, and Columbia Threadneedle-managed TR Property Investment Trust, all among Assura’s top investors, have voiced their concerns about the KKR proposal. Schroders, holding a five per cent stake, stated through its Head of UK Equities, Sue Noffke, that a share-based merger with PHP would deliver better returns for shareholders. This approach would enable investors to benefit from the anticipated synergies between the two companies and their sustained growth in property values and rents.

Aberdeen fund manager Romney Fox also expressed support for negotiations with PHP, highlighting the importance of keeping Assura within the publicly listed domain. According to Fox, a tie-up with PHP would provide enduring value while enabling the creation of a more cost-efficient healthcare-focused real estate investment trust (Reit). Fox’s position aligns with other investors who believe retaining listed status could strengthen returns without the risks of private ownership.

TR Property Investment Trust, which holds shares in both Assura and PHP, has been a strong advocate for the merger. Its head, Marcus Phayre-Mudge, remarked that these companies should have been integrated long ago to realise the operational efficiencies their US peers already enjoy. Phayre-Mudge warns that without consolidation, London-listed Reits will remain vulnerable to buyouts by opportunistic US firms eager to capitalise on undervalued UK assets.

The KKR consortium, however, continues to defend its position, claiming their deal offers superior value compared to PHP’s bid. According to the consortium, PHP’s offer includes significant complications, including high debt levels that could require extensive asset sales, potentially limiting the business’s ability to commit to long-term investment in NHS infrastructure.

While investors remain divided on the best strategy for Assura’s future, the outcome of this bidding war could reshape the landscape of healthcare property investments and potentially reinforce the resilience of UK-listed companies against overseas acquisitions. Assura’s board is now faced with difficult decisions as it weighs shareholder demands against competing proposals.