Assura bids £28.3m for AHMP
ASSURA Group, the Warrington-based property firm which develops GPS surgeries and community hospitals, has launched a takeover bid for competitor firm AH Medical Properties plc (AHMP).
The bid, which values Buckinghamshire-based AHMP at around £28.3m, 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 at 39.2p a share, 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 2010 and a premium of 3.2% over yesterday’s closing price of 38p per share.
The offer has been recommended by AHMP’s board.
Assura said that the merger would create the country’s largest listed primary care medical property and pharmacy group with assets of £504m and access to “an attractive pipeline of future investment opportunities”.
It added that it has already received undertakings from 76.2% of AHMP’s shareholders and the bulk of these have given assurances that they will not look to take the cash alternative.
As a result, the firm is proposing to raise £11.4m through an open offer and £12m through a placing of new Assura shares at a price of 45p per share. The proceeds will be used for the cash alternative, for future acquisitions and to pursue new development opportunities.
As part of the deal, the firm has agreed to acquire three development properties from AHMP’s property partner Ashley House, to allow Ashley House to carry out due diligence on some of its projects and to provide a loan to a joint venture project between AHMP and Ashley House to develop a project at Scarborough. Assura will also be given first refusal on any future projects to be developed by Ashley House over the next six months.
Rodney Baker-Bates, Chairman of Assura, said: “This transaction, which is expected to be earnings enhancing, will create the leader in the UK primary healthcare property investment market.
“It combines two high quality medical property portfolios generating excellent returns and enables us to deliver improved value to existing and new shareholders by leveraging our cost-effective, internally-managed structure.
“We are also pleased to benefit from AHMP’s three development opportunities, as well as the pipeline provided from our arrangements with Ashley House.”
John Gunn, Chairman of AHMP, said that his board had delivered a positive outcome for shareholders since the business’s inception in in late 2004.
“Since 2008 the commercial property and indeed financial markets have been difficult so to have come through such a period and delivered a positive total shareholder return is a source of satisfaction.”
Ashley House’s board responded positively to the deal announcement. It owns 25.18% of AHMP and the deal could lead to it receiving £4m in cash through the acquisition of properties owned by the pair, the loan to the joint venture and the payment of outstanding fees owed by AHMP.
Ashley House chief executive Jonathan Holmes said: “The completion of this deal will not only significantly improve the Company’s capital position but also give us a new larger development partner, securing the Company’s funding ability for the foreseeable future.”
