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The competition regulator has stepped up an inquiry into the £1.8billion takeover of NHS landlord Assura as suitors battle for control of the group.
Britain’s Competition and Markets Authority on Friday said it would investigate PHP’s acquisition of its rival real estate investment trust to determine whether it would ‘result in a substantial lessening of competition’ in the UK market.
Both Assura and PHP invest in properties leased out to healthcare organisations, including the National Health Service. Assura owns more than 600 buildings, including doctors’ surgeries, with a portfolio valued at about £3.1billion. It has about 80 employees.
It came as private equity giant KKR urged Assura’s board to reconsider its June decision to reject its consortium’s £1.6billion bid in favour of PHP’s offer after a three-month bidding war.
When the healthcare buildings business backed the PHP bid, it said KKR’s lower offer posed ‘material risks and downsides’ for its shareholders. But KKR said on Friday ‘a number of factors have changed’ which make PHP’s offer less attractive.
It claims that its cash offer is now 1.1 per cent higher than PHP’s because of a decline in the shares prices of both PHP and Assura in recent weeks.
Significantly it also said its offer would result in ‘no competition or antitrust risk’ and is ‘able to provide the strongest ongoing stewardship for Assura, its team and all stakeholders including investing in NHS infrastructure’.
The CMA has now served an initial enforcement order to block PHP from fully integrating Assura while it looks into the deal. It launched a consultation last month into PHP’s agreed takeover for Assura, in what marked the first step ahead of a formal investigation.
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