Shares in U.S. private equity giant KKR & Co (KKR) were flat today as it suffered a potential knockout blow in its fight to buy British healthcare property developer Assura.
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Just two weeks after Assura said it had reached an agreement on a $2.3 billion takeover from KKR and Stonepeak Partners, it changed its mind today preferring a merger with healthcare investor Primary Health Properties (PHP) instead.
Assura said it had now agreed a KKR-beating $2.4 billion cash and shares offer from PHP and declared that its terms are in the best interests of Assura shareholders. As such the Assura Directors intend to recommend unanimously that Assura Shareholders accept the PHP offer.
Ed Smith, non-executive chair of Assura, said: “Following recent engagement between PHP and Assura, PHP has today further increased the terms of its offer, and has also addressed some of the potential risks that Assura had previously raised.”
Battle Won
Both PHP and KKR have upped their offers in recent months in a heated bidding war. Back in the Spring Assura agreed to be bought by KKR for $2.16 billion. This led to PHP coming in with a higher bid of around $2.2 billion and KKR retorting with its “best and final” $2.3 billion offer.
Assura owns more than 600 buildings, including doctors’ surgeries, with a portfolio valued at around £3.1 billion. It has about 80 members of staff.
It counts the UK’s state-backed and under-pressure National Health Service as a customer and it is expected that following the deal funds will be spent on accelerating the building of new healthcare facilities and improving existing ones.
“Assura has found itself the target of a prolonged takeover fight. The board seem happy to back whoever is offering the most amount of money,” said Russ Mould, investment director at AJ Bell.” It’s unusual to see two competing parties fight this long, but it now looks like PHP has won the battle.”
Is KKR a Good Stock to Buy Now?
On TipRanks, KKR has a Strong Buy consensus based on 12 Buy ratings. Its highest price target is $189. KKR stock’s consensus price target is $142.50 implying an 16.23% upside.
