KKR and British Pension Fund Launch Bid for NHS Property Giant Assura

A significant move in the UK healthcare property sector emerged today as American private equity firm KKR partnered with the Universities Superannuation Scheme (USS) to make a takeover bid for Assura, one of the NHS’s largest property landlords.

The preliminary approach targets Assura’s portfolio, which encompasses more than £3 billion worth of doctors’ surgeries, healthcare centres, and hospitals throughout Britain. The company, established in 2003, currently manages over 600 healthcare buildings, generating annual rental income of £179 million, with approximately 80% of this revenue ultimately backed by the NHS.

The timing of this bid appears strategic, as Assura’s shares currently trade at a 21% discount to net asset value, reflecting broader market scepticism about property valuations. The stock responded positively to the news, climbing 4.2% to close at 39p, placing the company’s market capitalisation at £1.3 billion.

USS, Britain’s largest pension fund managing £75 billion in academic staff savings, has previously demonstrated its appetite for UK infrastructure assets. The potential acquisition aligns with Chancellor Rachel Reeves’ vision of keeping pension fund investments within British borders.

The deal would mark KKR’s second major UK acquisition in recent months, following its £1.3 billion purchase of Smart Metering Systems last year. This approach comes amid a surge of private equity interest in London-listed companies, with recent successful takeovers including BBGI’s £1 billion acquisition by a Canadian pension fund.

While Assura’s board acknowledges the approach, they maintain a cautious stance, emphasising their confidence in the company’s long-term prospects and ability to create shareholder value. The outcome remains uncertain, with shareholders advised to hold their positions while the proposal undergoes review.