Wrap Text
Statement regarding shares and cash offer by Primary Health Properties PLC for Assura plc
Primary Health Properties PLC
(Incorporated in the United Kingdom)
Company Number: 3033634
LSE Share Code: PHP
JSE Share Code: PHP
ISIN Code: GB00BYRJ5J14
LEI: 213800Y5CJHXOATK7X11
("PHP" or the "Company")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN
PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF
THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
13 June 2025
Statement regarding shares and cash offer by Primary Health Properties PLC for Assura plc
• Consent to accelerate October Assura quarterly dividend
• Lowering of Acceptance Condition to PHP Offer
• Response to Assura Announcement
1. Introduction
The Board of Primary Health Properties PLC ("PHP" or the "Board") notes the announcement by Assura plc
("Assura") on 11 June 2025 (the "Assura Announcement") setting out Assura's views on the firm offer for Assura
announced by PHP on 16 May 2025 (the "PHP Offer") and the Assura Board's recommendation of the offer by
Sana Bidco Limited ("Bidco") announced on 11 June 2025 (the "Bidco Offer").
The Board continues to firmly believe that a combination of Assura and PHP (the "Combination") represents a
highly compelling proposition which will deliver significant strategic, operational and financial benefits for both sets
of shareholders.
This is underpinned by the Board's belief that the sector is at an inflexion point in the current economic cycle with
strong rental growth and lower interest rates enhancing primary care property values and with net asset values
per share expected to continue to improve.
The Board notes that, based on the closing PHP share price of 103.0 pence per share on 12 June 2025, being
the last trading day before the date of this announcement, the PHP proposal implies a total value of 53.0 pence
per share (the "Offer Value"), inclusive of the Assura April dividend already paid and the Assura July dividend
declared on 19 May 2025. This implies a premium of 1.7 per cent. to the Bidco Offer.
2. Accelerated quarterly dividend
Under the terms of the PHP Offer, PHP announces that it will not reduce the value of the PHP Offer if the Assura
Board declares a special dividend (the "Special Dividend") conditional on the Offer becoming Unconditional, of up
to a maximum of 0.84 pence per Assura Share, in lieu of and representing an acceleration of the dividend expected
to be paid to Assura Shareholders during October 2025, in the ordinary course, based on Assura's usual timetable.
PHP look forward to confirmation from the Assura Board of the Special Dividend.
3. Matching Acceptance Condition as the BidCo Offer
In order to increase the certainty of execution, the Acceptance Condition (as defined in the PHP Offer), will be
reduced to PHP having received acceptances of the Offer in respect of Assura Shares representing more than 50
per cent of the voting rights normally exercisable at a general meeting of Assura Shareholders, which is the same
acceptance condition as the Bidco Offer.
Further details will be provided within the PHP Offer Document to be published in due course.
4. Response to the Assura Announcement
PHP strongly disagrees with certain assertions made by the Board of Assura in the Assura Announcement around
the financial risks to the Combination. In addition, whilst the Assura Board has cited the due diligence undertaken
with PHP, the Board of PHP has concerns around the level of engagement, objectiveness and responsiveness in
this process.
The Board welcomes the acknowledgement by the Board of Assura that the PHP Offer has certain "potential
benefits" and urges the Board of Assura to consider carefully the points below which address the assertions made
concerning the PHP Offer. 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.
• Financial risk
The Assura Board states that (i) "the cash element of the PHP Offer would result in a level of leverage significantly
exceeding the target loan-to-value ratios of Assura and PHP"; and (ii) "approximately £2 billion of refinancing
obligations over the next two to three years…..near-term maturities expose Assura shareholders to adverse
changes in financing costs…"
PHP Response: Clear plan to reduce leverage, targeting strong investment grade credit rating
The PHP Board believes these statements do not accurately reflect the structure and rationale of the PHP Offer,
with its clearly stated plan for reducing leverage and the nature of the acquisition financing arrangements,
principally:
• Leverage will only temporarily be greater than target range with the planned disposals reducing leverage
to within the target range of 40 – 50 per cent. loan-to-value in the short-term;
• Fitch confirmed in their report of 19 May 2025 that Assura would remain investment grade following the
Combination;
• The Combined Group expects to obtain, post completion, its own investment grade rating accelerating
PHP's transition towards an unsecured debt structure of scale;
• PHP's £1.225 billion acquisition facilities include commitments in respect of existing short-term maturities,
including repayment of the £322 million of PHP debt due to mature in the next 18-24 months, with no
further PHP debt maturities expected until the fourth quarter of 2027;
• PHP has obtained a change of control waiver and expects to obtain an extension in respect of the £266
million Barclays term loan to Assura, which would extend maturity to late 2027, and include further
extension options which, if agreed, would further extend the maturity of this loan to 2029;
• With Assura's consent PHP continues to have positive discussions with lenders and private placement
loan note holders regarding further change of control waivers; and
• PHP believes the majority of Assura's existing lending stakeholders would prefer to see a Combination
with a more transparent and robust corporate governance structure rather than the uncertainty and
opaque structure typical of private equity transactions.
Through the combination of an expected strong investment grade credit rating, greater access to the public bond
markets, which is the deepest pool of capital for unsecured borrowers, and close bank lending relationships, the
PHP Board believes it has diverse sources of cost effective and long-term financing options. The PHP Board has
extensively consulted with both sets of shareholders following the PHP Offer and does not consider that the
refinancing risk highlighted by the Assura Board is significant. Furthermore the PHP Board believes that there are
significant potential cost of capital benefits from the Combination.
• Execution risk
The Assura Board states that: "with the benefit of its experience in conducting disposals and knowledge of the
relevant private hospital market…[it] is concerned about the execution risk associated with the required size and
timing of these disposals and the acceptability of the terms that might be available to the combined group
especially under the PHP stated joint venture disposal structure"
PHP Response: Strong confidence in execution of deleveraging plan
The PHP Board is highly confident in its ability to deliver its stated disposal programme, having received strong
interest and positive sentiment towards both primary healthcare assets and private hospital properties for the
stated joint venture disposal structure.
Recent sales processes for private hospital portfolios have seen, and continue to see, strong interest from a
number of potential acquirers, including in the process culminating in Assura's acquisition of its portfolio of private
hospitals in the second half of 2024. Furthermore, the competitive situation for Assura and its joint venture with
USS, which Assura entered into in 2024, demonstrate the weight of capital seeking to invest in healthcare real
estate.
The PHP Board believes that strong investor interest in this asset class is underpinned by: (i) the long-dated
inflation linked leases which provide greater certainty of rental growth (as the Board of Assura highlights in the
Assura Announcement); and (ii) growing demand for private healthcare services and few portfolios of scale,
including as referenced by Assura's CEO Jonathan Murphy at the time of the acquisition of the hospital portfolio:
"This represents a unique opportunity to participate in the growing demand for private healthcare services to help
ease growing NHS waiting lists".
PHP has had preliminary discussions with a number of highly credible potential joint venture partners and based
on these discussions, which the Board of PHP would expect to progress with in due course and in particular once
fuller information is made available on the Assura portfolio, along with the favourable wider market conditions
referred to above, the PHP Board is confident that it will be able to execute a transaction on acceptable terms,
that would enable PHP to reduce its loan-to-value ratio to within its existing target range of 40 – 50 per cent. in
the short-term.
• Reduced exposure to long-dated, inflation-linked leases
The Board of Assura stated in its announcement on 11 June 2025 that "A combination with PHP, together with
planned disposals of Assura's private hospital portfolio assets, would significantly dilute Assura shareholders'
exposure to private healthcare assets, the majority of which benefit from long-dated inflation-linked leases which
provide greater certainty of rental growth than OMR leases"
PHP Response: PHP's core focus is long-leased, primary healthcare assets leased to government tenants
The Board of PHP believe that the composition of the combined portfolio would deliver a higher exposure to state-
backed income and would provide significant benefits for shareholders of the combined group, including:
• A £6 billion portfolio of long-leased, sustainable infrastructure assets principally let to government tenants
and leading UK healthcare providers, benefiting from increased income security, longevity, diversity of
product type, geography and mix of rent review types;
• Combined ability to realise embedded rental increases and back rent arising from the significant number
of outstanding open market rent reviews across both portfolios; and
• Expected retention of an equity position, and additional management fee income, in respect of the private
hospital assets, with these being sold into a joint venture.
Furthermore, the Board of PHP views the income profile and growth outlook of index-linked private hospital leases
as similar to open market rent leases, particularly given caps and collars within the index-linked leases, whereby
the rent is determined by the District Valuer with reference to inflation.
• Integration risk
The Board of Assura has outlined in its announcement "the Assura Board believes these concurrent activities
[portfolio sales, refinancing and realisation of synergies] would introduce heighted execution risk and operational
disruption with corresponding financial uncertainty"
PHP Response: PHP is an experienced owner of primary care properties, with a track record of delivering
integration plans and relative outperformance versus Assura on Total Property Returns in every reported
full year since 2017
The Board highlights:
• PHP has outperformed Assura on Total Property Returns by 11.8 per cent over the last reported three
year period, 17.5 per cent over the last reported five year period and by 20.9 per cent over the last reported
seven year period;
• PHP has experience and a track record of successfully executing a public merger, demonstrated by the
successful acquisition and integration of MedicX Fund Limited in 2019;
• As set out above, there are no short-term refinancings to be managed and PHP will have significant
liquidity headroom post the Combination to allow it to continue to deliver accretive asset management
initiatives and development projects;
• Synergy realisation is expected to accrue 60 per cent. from reduction in overlapping roles and 20 per
cent. from rationalisation of duplicative costs, neither of which pose significant operational or day-to-day
risks to the business; and
• The businesses are, on a headcount basis, small in scale, with highly complementary portfolios, some
commonality in software systems and overlap in business models
PHP remains ready to engage in dialogue with Assura to address their concerns and work towards the creation
of a leading UK income focussed REIT, supported by a structural undersupply of modern primary care properties
and favourable government policy.
The Board of Assura has also outlined in its announcement "while the Assura Board notes that CMA clearance is
not a condition of the PHP Offer, Assura Shareholders would still bear a risk in this regard as an extended review
would risk delaying PHP's disposal programme"
PHP Response: PHP has proactively notified the terms of the Combination to the CMA and has begun the
process of pre-notification dialogue with the CMA. To date Assura has refused to provide the relevant
documents directly to PHP, which could have the effect of unnecessarily delaying the regulatory
clearance process
The PHP Board highlights:
• Based on its analysis to date, PHP does not believe there to be any substantive competition issues or
overlaps in the relevant jurisdictions; and
• PHP is actively seeking to obtain the cooperation of Assura to provide documents to PHP's advisors as
soon as possible so as to permit PHP to submit this information to the CMA in the shortest possible
timescale
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. PHP continues to work diligently with the relevant authorities to ensure
all necessary filings are made and the approvals obtained as quickly as possible.
A further announcement will be made when appropriate.
Assura shareholders are strongly advised to take no action in response to the Bidco Offer.
Enquiries:
PHP +44 (0) 7970 246 725
Harry Hyman, Non-Executive Chair via Sodali & Co
Mark Davies, Chief Executive Officer
Richard Howell, Chief Financial Officer
Rothschild & Co (Joint Lead Financial Adviser to PHP) +44 (0) 207 280 5000
Alex Midgen
Sam Green
Nikhil Walia
Jake Shackleford
Deutsche Numis (Joint Lead Financial Adviser to PHP) +44 (0) 207 260 1000
Kevin Cruickshank
Heraclis Economides
Stuart Ord
Ben Stoop
Jack McLaren
Citi (Joint Financial Adviser to PHP) +44 (0) 20 7986 4000
Bogdan Melaniuc
James Ibbotson
Robert Redshaw
James Carton
Michael Mullen
Peel Hunt (Joint Financial Adviser and Joint Broker to PHP) +44 (0) 20 7418 8900
Capel Irwin
Michael Nicholson
Henry Nicholls
Sodali & Co (Communications for PHP)
Rory Godson +44 (0) 7970 246 725
Elly Williamson
CMS Cameron McKenna Nabarro Olswang LLP are retained as legal adviser to PHP.
The person responsible for arranging the release of this announcement on behalf of PHP is Toby Newman,
Company Secretary.
Further information
N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is authorised and regulated by the Financial Conduct
Authority in the United Kingdom, is acting exclusively for PHP and for no one else in connection with the subject
matter of this announcement and will not be responsible to anyone other than PHP for providing the protections
afforded to its clients or for providing advice in connection with the subject matter of this announcement. This
announcement is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe
for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any
jurisdiction.
Numis Securities Limited ("Deutsche Numis"), which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting exclusively for PHP and no one else in connection with the matters set out
in this announcement and will not regard any other person as its client in relation to the matters in this
announcement and will not be responsible to anyone other than PHP for providing the protections afforded to
clients of Deutsche Numis, nor for providing advice in relation to any matter referred to herein. Neither Deutsche
Numis nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts
any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute
or otherwise) to any person who is not a client of Deutsche Numis in connection with this announcement, any
statement contained herein or otherwise.
The release, publication or distribution of this announcement in jurisdictions outside the United Kingdom may be
restricted by law and therefore persons into whose possession this announcement comes should inform
themselves about, and observe such restrictions. Any failure to comply with such restrictions may constitute a
violation of the securities law of any such jurisdiction.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of
an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position
Disclosure following the commencement of the offer period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule
8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business
day following the announcement in which any securities exchange offeror is first identified. Relevant persons who
deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant
securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure
by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to
acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they
will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing
Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with
any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures
and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period
commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.
Rule 26.1 disclosure
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.phpgroup.co.uk
promptly and in any event by no later than 12 noon on the business day following this announcement. The content
of this website is not incorporated into and does not form part of this announcement.
Profit Forecasts and Estimates
No statement in this announcement is intended to constitute a profit forecast or profit estimate, no statement in
this announcement is subject to the requirements of Rule 28 of the Code and no statement in this announcement
should be interpreted to mean that the earnings or future earnings per share of or dividends or future dividends
per share of PHP and/or Assura for current or future financial years will necessarily match or exceed the historical
or published earnings or dividends per share of PHP or Assura, as appropriate.
The Company has a primary listing on the London Stock Exchange and a secondary listing on the JSE Limited.
United Kingdom
Sponsor: PSG Capital
Date: 13-06-2025 08:00:00
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