Assura takeover battle heats up as UK peer PHP outbids US suitors

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By Yamini Kalia and Yadarisa Shabong

(Reuters) -British healthcare real estate investor Primary Health Properties (PHP) has offered to buy peer Assura for about 1.68 billion pounds ($2.23 billion), outbidding rival U.S. suitors KKR and Stonepeak Partners.

Assura agreed to a 1.61 billion pound takeover bid from private investment firms KKR and Stonepeak Partners in early April, after rejecting a lower bid from PHP.

UK-based Assura said its board was reviewing the new offer from PHP and advised shareholders to take no action.

PHP’s new cash-and-stock offer values Assura, which counts the British National Health Service among its clients, at 51.7 pence, including dividend. The offer is 4.7% higher than the 49.4 pence per share offered by KKR and Stonepeak.

Shore Capital analyst Andrew Saunders said the PHP offer is “by far the more attractive” offer for Assura shareholders.

“If Assura shareholders take cash from KKR, that means they will miss out on a very lucrative period of growth and returns over the next few years,” Saunders said.

Shares in Assura rose 1.6% to 49.64 pence. PHP shares were 0.5% lower.

“Given the importance of these social healthcare assets to the public good and the government’s commitment to primary care reform, we also believe PLC ownership provides appropriate stewardship of these assets,” PHP Chair Harry Hyman said in a statement.

PLC refers to a public limited company listed in the UK.

The board of Assura said in April it planned to recommend the offer by the KKR-Stonepeak consortium.

Representatives for KKR and Stonepeak did not immediately respond to Reuters requests for comment on the new PHP offer.

PHP said Assura shareholders would own about 48% of the combined group, subject to full acceptance of the offer.

($1 = 0.7531 pounds)

(Reporting by Yamini Kalia and Yadarisa Shabong in Bengaluru; Editing by Shailesh Kuber and Barbara Lewis)