Assura snubs MedicX takeover move

ASSURA Group, the listed North West healthcare focused developer, has unanimously rejected an all-share takeover approach from MedicX, one of its rivals.

Warrington-based Assura branded the approach from the Surry firm as  “opportunistic” and said it failed to recognise the existing and potential value of its business.

It questioned too MedicX’s dividend policy and emphasised its own strong position following its recent transformation.

Setting out what the potential deal was rejected Assura said: “The Proposal seeks opportunistically to capitalise on MedicX’s current higher rating relative to NAV, a disparity which the board believes is not justified given the outlook for Assura.

“Moreover, the Board is sceptical as to whether MedicX’s market rating can be maintained given its policy of paying uncovered dividends, in part funded by regular share issues, and the continued growth rate which such a rating implies, in particular from an enlarged business.

“The timing of the approach and the issues as to the sustainability of MedicX’s dividend and share price make the value to Assura shareholders of the proposed terms both highly uncertain and unpredictable.”

MedicX said last week the deal represented an offer price of 40p a share and would create “substantial value” for the shareholders of both companies.

Assura also published its results for the year to the end of March, which it said proved that its strategy is working.

Total property assets rose £20m to £569m, while net rental income rose 9.1% to £33.7m amd underlying profit from continuing operations soared 44% to £10.2m.

Chief executive Graham Roberts said: “The actions we have taken over the year have delivered strong results.  We have focused on delivering rental growth, developing profitably and to customer satisfaction, selling non-core assets and building our development pipeline of opportunities.
 
“Our dividend is 1.6x covered by underlying profits and a 6% increase from April 2013 reflects the board’s confidence in the group and its future.”

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