9 April 2025
If you are covering the news that Assura's board has recommended an all-cash takeover offer from KKR, please see the following comment from Oli Creasey, head of property research at Quilter Cheviot:
"NHS landlord, Assura, has today provided updated information surrounding the various competing bids for the company. The board has recommended an all-cash offer from KKR, while simultaneously rejecting a cash and share offer from close peer Primary Health Properties.
"The KKR cash offer is, on paper, worth more than the shares from PHP. However, the cash offer, which is 48.6p, somewhat undervalues the company. Assura last reported a net disposal value (NDV) of 55p for September 2024 and is due to report an updated figure in the coming weeks. UK REITs typically report several NAV measures, including NDV; we believe that under the circumstances, the net disposal value is the relevant metric for comparison. We would also expect a modest increase in the NDV for March 2025, given the improvements in capital values across UK commercial real estate in the intervening period.
"While the bid from Primary Health Properties would put less cash in the pocket of Assura investors, it allows them to retain an investment in the primary healthcare subsector, and in a larger combined company, providing both diversity and improved liquidity. Many Assura investors value the firm’s high and secure income yield; something that is next to impossible to find elsewhere on the stock exchange. Investors with a long term outlook may see reasons to value the Primary Health Properties bid, or Assura’s continued existence as a standalone company, as worth more than the cash offered by KKR given the challenge of reinvesting it."
