The Competition and Markets Authority has started an investigation into Primary Health Properties PLC's (LSE:PHP, OTC:PHPRF) £1.79 billion bid to acquire Assura Group (LSE:AGR).
In a statement, the CMA said it will look at whether the deal creates a relevant merger situation and if it could hurt competition in the UK healthcare property markets.
Primary Health Properties bumped up its offer to edge out a rival bid from private equity firms KKR and Stonepeak. Under the improved terms, Assura shareholders will get 0.3865 new PHP shares and 12.5p in cash per share, plus a special dividend of 0.84p.
Based on PHP’s last closing price of 103.5p, the deal values each Assura share at up to 55p. That’s a 5.8% premium over the competing cash offer and a 47% boost over Assura’s share price before takeover talks began.
Assura investors will hold around 48% of the combined group. A mix-and-match option lets shareholders adjust how much cash or equity they receive. The cash element will be funded by a £1.23 billion loan.
The Assura board has dropped its backing of the private equity bid and now supports PHP’s proposal.
Assura's shares were unmoved in Friday morning trading. PHP's shares were up 0.1% at 96.9p.