In Focus: Assura’s £28m deal ‘offers stability during health reforms’

ASSURA Group’s proposed £28m takeover of rival AH Medical Properties (AHMP) will insulate the business against uncertainty surrounding the Government’s radical health reforms, says its chief executive.

The Warrington-based firm develops GP surgeries and community hospitals and also runs a chain of pharmacies. It employs 300 people at pharmacies and further 60 managing the portfolio.

It should be well-placed to benefit from the Government’s plan to abolish primary care trusts and shift spending power to GPs.

But chief executive Nigel Rawlings expects uncertainty in the sector during the time its takes for the Health and Social Care Bill to go through Parliament.

“There will be uncertainty and people don’t want to invest during a period of uncertainty,” Mr Rawlings, pictured, told TheBusinessDesk. “There’s nervousness in terms of how long this is going to take to settle down.

“The direction of travel is very helpful because our focus is on primary care but it’s a question of the period in which this beds down and there’s some uncertainty over how succesful it will be and to what extent mistakes will be made carrying out what’s a radical shift.”

He added: “Having said that one of the things we like about AHMP is it gives us access to their pipeline and that will hopefully keep us busy.”

The deal will bring together Assura’s 113 medical centres, with a value of £341m, with 52 owned by Plus-listed AHMP, valued at £125m. Assura has a further five development sites in progress. Under the terms of the deal it will take on three from AHMP’s property partner Ashley House.

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The company has also raised £23m through a firm placing and an open offer which will be used to fund the development pipeline.

The bid will see Assura offer 0.85 new Assura shares for each AHMP share in circulation. There is also a cash alternative of 40p per AHMP share, but this is limited to £10.5m. The offer values each AHMP share at 39.2p, which Assura said is a premium of 22.5% over the 32p per share the firm was valued at when it entered into an offer period back on August 9.

Mr Rawlings said the cash element was offered to allow some AHMP shareholders to exit the business. Shareholders will decide on the deal at an EGM later in the month.

Simon Lord, managing director of the investment bank Altium, has been advising Buckinghamshire-based AHMP on the deal. “The shareholders are very supportive of the deal,” he said. “It’s the right thing for the business. Liquidity was limited on Plus and it means the business can be part of a bigger group like Assura.”