NHS landlord Assura chooses PHP merger over KKR takeover

Shareholders of Assura, a leading landlord to the NHS, have voted decisively to merge with Primary Health Properties (PHP) rather than accept a £1.7 billion all-cash takeover from American private equity group KKR and its partner Stonepeak. The vote, which concluded with 62.9 per cent in favour of the PHP merger, brings to an end a heated takeover battle that attracted attention in both City circles and the House of Lords.

Assura, based in Altrincham and established in 2003, owns more than 600 healthcare properties, valued at £3.2 billion. Its chosen partner, PHP, holds a complementary portfolio of 516 surgeries, dental practices, and medical centres stretching from the south-east of England to the Scottish Highlands and across to Ireland, together accounting for £2.8 billion in assets. Their combined rental income last year amounted to £333 million, with the lion’s share secured by government-backed revenues.

The PHP offer gives Assura shareholders £460 million in cash and a 48 per cent stake in the merged company. A key motivation for supporting the merger was widespread agreement among investors and industry analysts that accepting a private equity buyout now would mean relinquishing future upside just as rents and property valuations are expected to strengthen.

Several major shareholders, including Schroders, Aberdeen, TR Property Investment Trust, Gravis, and Baillie Gifford, made public their preference for remaining invested in a UK-listed healthcare real estate business. Their influence proved decisive, persuading the Assura board to abandon its initial support for the KKR cash offer in favour of the PHP merger.

Analysts have framed shareholder backing for the tie-up as a win not only for PHP but for critical healthcare infrastructure and the UK stock market. As PHP chairman Harry Hyman acknowledged, investor support affirms the group’s commitment to modernising primary care across the UK and Ireland. Mark Davies, chief executive of PHP, highlighted their shared vision for enhancing social infrastructure in the sector.

KKR and Stonepeak are now likely to divest their 5 per cent stake in Assura, having failed with their bid. Once support for the merger exceeds 75 per cent, Assura will be delisted, making way for integration subject to approval by the Competition and Markets Authority.