Assura Group (LSE:AGR) has agreed to merge with Primary Health Properties PLC (LSE:PHP, OTC:PHPRF), which has raised its offer to £1.79 billion to edge out a rival bid by private equity groups KKR and Stonepeak.
Under the terms of the increased offer, Assura shareholders will receive 0.3865 new PHP shares and 12.5p in cash for each share they own, and under revised terms offered last week, will also be entitled to a special dividend of 0.84p per share.
Based on PHP’s latest closing share price of 103.5p from last Friday, 20 June, the offer implies a total value of 53.3p per Assura share, or 55.0p when including previously declared dividends.
This represents a 5.8% premium to the competing all-cash private equity offer of 50.42p per share and reflects a 47% premium to Assura’s share price in mid-February, the day before the offer period began.
Assura shareholders will together own around 48% of the enlarged healthcare property group.
The Assura board now supports the PHP offer and has withdrawn its recommendation of the private equity consortium’s bid.
A 'mix and match facility' will be available to allow Assura shareholders to vary the proportions of cash and PHP shares they receive. The cash portion of the offer will be financed by a £1.23 billion loan facility.
“The PHP board continues to believe in the strong strategic rationale of the combination, which will create a leading healthcare focussed listed REIT with the scale and expertise to deliver significant benefits for the shareholders in PHP and Assura.”