KKR Has A Month To Decide On £1.6B Takeover Bid As Its Target Rejects Latest Attempt

Private equity firm KKR has a month to decide whether to put in a fresh bid for listed healthcare real estate investor Assura after its latest proposal to buy the company was rejected and its partner in the deal said it would drop out.

KKR said Monday that it had made a nonbinding proposal of 48p a share for Assura, valuing the company at £1.6B. That is 28% above Assura’s share price before the offer was announced but 3% below the net asset value of the properties Assura owns. 

Assura rejected the offer, the fourth KKR has made for the company. KKR now has until 14 March to decide whether to submit a formal bid. 

The offer was made in conjunction with the Universities Superannuation Scheme, the pension fund for UK university lecturers.

On Monday, USS said that it did not intend to make any further offer for Assura as part of this consortium or otherwise. 

Assura is one of Europe’s largest healthcare property owners. Its portfolio comprises 608 properties valued at £3.2B, which generate annual rent of £177M. 

The bulk of its portfolio is GP surgeries and assets let to the NHS. Together, those make up 66% of its rent roll. The weighted average lease length of its portfolio is 13.1 years. 

But Assura is also looking to diversify its assets. Last year, it bought a portfolio of private hospitals for £500M. The weighted average lease length on the portfolio is 26 years, with annual rent reviews linked to inflation. 

The last time Assura’s share price was above 48p was June 2023. Real estate share prices have been depressed because of higher-for-longer interest rates. 

Analysts at Green Street said that Assura should consider any offer above 49p a share, Bloomberg reported.