KKR and Stonepeak Raise Bid for UK's Assura to $2.3 Billion

Bengaluru: Private equity firms KKR and Stonepeak Partners have raised their offer for Britain's Assura to almost 1.7 billion pounds ($2.3 billion), topping a rival bid with their 'best and final' offer for the healthcare real estate investor.

The 52.1 pence a share offer, including dividends, surpasses the 51.7 pence proposed by rival suitor Primary Health Properties (PHP) last month. This new bid represents a more than 39% premium to Assura's closing price on February 13, the day before KKR and Stonepeak's initial approach. Since then, Assura's stock has soared 32%, giving the company a market capitalization of 1.6 billion pounds as of Tuesday.

Assura manages over 600 healthcare properties with an investment value exceeding 3 billion pounds, and counts Britain's state-backed National Health Service (NHS) as a significant customer. This acquisition is part of a growing trend of UK companies being bought out by overseas private equity firms or investment companies, attracted by comparatively cheap valuations.

The latest all-cash offer is deemed 'lower risk than other alternatives' and requires no divestment, according to KKR Managing Director Andrew Furze. In April, Assura had backed KKR and Stonepeak's previous cash offer, which prompted a higher bid from PHP last month. Some analysts had suggested that PHP's offer was more attractive due to its mix of cash and stock, providing ownership of social healthcare assets via a UK-listed public limited company.

PHP did not immediately respond to a request for comment. The increased bid by KKR and Stonepeak highlights the competitive landscape in healthcare real estate investment, where private equity firms are vying for strategic assets to enhance their portfolios and capitalize on the growing demand for healthcare facilities.

The deal, if successful, could significantly impact the UK healthcare real estate market, potentially leading to further consolidation and investment in the sector. It also underscores the confidence of private equity firms in the resilience and growth potential of healthcare infrastructure, particularly in the wake of the global pandemic and ongoing healthcare reforms.

($1 = 0.7415 pounds) (Reporting by Yadarisa Shabong and Shashwat Awasthi in Bengaluru. Editing by Janane Venkatraman and Mark Potter)