Primary Health Properties (PHP) has renewed its push for a merger with rival Assura Plc dismissing financial concerns raised by Assura’s board and underscoring strategic benefits in an intensifying battle over the future of Britain’s largest primary care real estate groups.
PHP is a UK-based Real Estate Investment Trust specialising in the acquisition, development, and management of primary healthcare facilities.
PHP and Assura are secondary listed on the JSE with primary listings on the London Stock Exchange.
On Friday afternoon PHP shares rose 6.7% at R25.01, while Assura’s shares were up 6.17% to R12.21.
PHP said on Friday it continues to believe a combination with Assura represents a “highly compelling proposition,” providing shareholders with long-term value and enhanced exposure to resilient healthcare property assets amid improving macroeconomic conditions.
The renewed statement follows Assura’s endorsement of a competing cash offer from private equity vehicle Sana Bidco, and its rejection of PHP’s all-share approach. PHP’s board argued that its proposal, based on its closing share price of 103 pence (R25.06) on June 12, implies a value of 53.0 pence per Assura share, 1.7% above the Bidco offer when dividends are factored in.
Dividend Sweetener and Revised Conditions
To bolster its bid, PHP said it would not reduce the offer value should Assura declare a special dividend of up to 0.84 pence per share – effectively accelerating the October dividend payout. It also said it would align its acceptance condition to match that of Bidco’s, requiring majority shareholder approval, in an effort to increase deal certainty.
“PHP strongly disagrees with certain assertions made by the Board of Assura in the Assura Announcement around the financial risks to the Combination,” it said.
PHP urged Assura’s board to reconsider its stance, “The Board believes that with further due diligence and consideration, and factoring in the Special Dividend, the Board of Assura should recommend the Combination to shareholders.”
Addressing Assura’s concerns over leverage and refinancing risk, PHP said its proposed financing structure includes a £1.225 billion acquisition facility that secures near-term debt maturities and maintains liquidity until late 2027. The company also cited a Fitch report from May confirming Assura would retain its investment-grade status post-merger.
PHP noted that the combined group would continue working toward an unsecured debt structure supported by broader access to capital markets and expected further waivers from Assura’s existing lenders, including Barclays.
“We do not consider the refinancing risk highlighted by the Assura Board to be significant,” PHP said, arguing the merger would actually improve access to long-term, cost-effective financing.
On execution risk, PHP said it has already seen strong investor interest in joint ventures and asset disposals, pointing to the robust demand for healthcare real estate.
PHP dismissed concerns over a potential dilution of inflation-linked lease exposure, arguing the combined £6 billion portfolio would offer stronger state-backed rental income and broader geographic and asset diversity. It also anticipates retained equity and fee income from hospital assets sold into joint ventures.
PHP emphasized its experience in delivering public mergers, citing its 2019 acquisition of MedicX Fund. It claimed synergies would mostly arise from administrative overlap, presenting minimal disruption to operations.
“PHP has outperformed Assura on total property returns every year since 2017,” the company said, noting long-term outperformance across three, five, and seven-year periods.
On regulatory matters, PHP acknowledged that Competition and Markets Authority (CMA) clearance is not a formal condition of its offer but said it had proactively begun pre-notification engagement. The firm criticised Assura for withholding documents needed to expedite the CMA’s review.
“PHP has sent to Assura a follow up request for cooperation by way of the early provision by Assura to PHP in the usual way of these documents and will continue to press the Assura Board to cooperate to assist PHP with the completion of its regulatory clearances, ” it said.
PHP urged Assura shareholders to take “no action” on the Bidco offer, as it continues to persue the transaction.
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