Primary Health Properties still the preferred bidder for Assura, says Shore Capital
By Benjamin Chiou
Date: Friday 09 May 2025
(Sharecast News) - Shore Capital has kept a 'buy' rating on healthcare real estate firm Primary Health Properties, saying the company is "still in the mix" over the bidding war for Assura and remains the preferable alternative to the latest offer from KKR and Stonepeak.
Assura announced on 9 April that it had reached an agreement with KKR and Stonepeak (together, Sana Bidco) over a 49.4p-a-share cash offer, after rejecting a cash-and-shares offer from PHP equivalent to 46.2p. The company then had to extend the deadline for the posting of a scheme document until 21 May.
However, Shore Capital hailed the synergy benefits from a potential PHP-Assura merger, comprising operational cost efficiencies and the benefits of scale in sourcing services and financing, as well as placing the combined group in good stead amid NHS reforms and accelerating rental growth.
Meanwhile, the shares element of PHP's offer represents "significant value upside" for Assura shareholders if they stay invested - especially given a predicted re-rating of the sector as interest rates fall further.
"[PHP's] offer has improved materially since announced in April following an appreciation of the PHP share price and is now worth 48.1p per Assura share - before synergy benefits and the re-rating potential," Shore Capital said.
"We believe shareholders should support the merger which would create a new powerhouse in a sector with attractive long-term growth prospects while also retaining domestic ownership of critical UK infrastructure. The merger would create the UK's largest healthcare REIT bringing together highly complementary primary care property portfolios, both focused on modern, long-term leased NHS-anchored facilities."
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