NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. 

FOR IMMEDIATE RELEASE                                                                

13 June 2025

Statement regarding shares and cash offer by Primary Health Properties PLC for Assura plc

·      Consent to accelerate October Assura quarterly dividend

·      Lowering of Acceptance Condition to PHP Offer

·      Response to Assura Announcement

1.   Introduction

The Board of Primary Health Properties PLC ("PHP" or the "Board") notes the announcement by Assura plc ("Assura") on 11 June 2025 (the "Assura Announcement") setting out Assura's views on the firm offer for Assura announced by PHP on 16 May 2025 (the "PHP Offer") and the Assura Board's recommendation of the offer by Sana Bidco Limited ("Bidco") announced on 11 June 2025 (the "Bidco Offer"). 

The Board continues to firmly believe that a combination of Assura and PHP (the "Combination") represents a highly compelling proposition which will deliver significant strategic, operational and financial benefits for both sets of shareholders.

This is underpinned by the Board's belief that the sector is at an inflexion point in the current economic cycle with strong rental growth and lower interest rates enhancing primary care property values and with net asset values per share expected to continue to improve.

The Board notes that, based on the closing PHP share price of 103.0 pence per share on 12 June 2025, being the last trading day before the date of this announcement, the PHP proposal implies a total value of 53.0 pence per share (the "Offer Value"), inclusive of the Assura April dividend already paid and the Assura July dividend declared on 19 May 2025. This implies a premium of 1.7 per cent. to the Bidco Offer.

2.   Accelerated quarterly dividend

Under the terms of the PHP Offer, PHP announces that it will not reduce the value of the PHP Offer if the Assura Board declares a special dividend (the "Special Dividend") conditional on the Offer becoming Unconditional, of up to a maximum of 0.84 pence per Assura Share, in lieu of and representing an acceleration of the dividend expected to be paid to Assura Shareholders during October 2025, in the ordinary course, based on Assura's usual timetable.

PHP look forward to confirmation from the Assura Board of the Special Dividend.

3.   Matching Acceptance Condition as the BidCo Offer

In order to increase the certainty of execution, the Acceptance Condition (as defined in the PHP Offer), will be reduced to PHP having received acceptances of the Offer in respect of Assura Shares representing more than 50 per cent of the voting rights normally exercisable at a general meeting of Assura Shareholders, which is the same acceptance condition as the Bidco Offer.

Further details will be provided within the PHP Offer Document to be published in due course.

4.   Response to the Assura Announcement

PHP strongly disagrees with certain assertions made by the Board of Assura in the Assura Announcement around the financial risks to the Combination. In addition, whilst the Assura Board has cited the due diligence undertaken with PHP, the Board of PHP has concerns around the level of engagement, objectiveness and responsiveness in this process.

The Board welcomes the acknowledgement by the Board of Assura that the PHP Offer has certain "potential benefits" and urges the Board of Assura to consider carefully the points below which address the assertions made concerning the PHP Offer. The Board believes that with further due diligence and consideration, and factoring in the Special Dividend, the Board of Assura should recommend the Combination to shareholders.

·      Financial risk

The Assura Board states that (i) "the cash element of the PHP Offer would result in a level of leverage significantly exceeding the target loan-to-value ratios of Assura and PHP"; and (ii) "approximately £2 billion of refinancing obligations over the next two to three years…..near-term maturities expose Assura shareholders to adverse changes in financing costs…"

PHP Response: Clear plan to reduce leverage, targeting strong investment grade credit rating

The PHP Board believes these statements do not accurately reflect the structure and rationale of the PHP Offer, with its clearly stated plan for reducing leverage and the nature of the acquisition financing arrangements, principally:

Through the combination of an expected strong investment grade credit rating, greater access to the public bond markets, which is the deepest pool of capital for unsecured borrowers, and close bank lending relationships, the PHP Board believes it has diverse sources of cost effective and long-term financing options. The PHP Board has extensively consulted with both sets of shareholders following the PHP Offer and does not consider that the refinancing risk highlighted by the Assura Board is significant. Furthermore the PHP Board believes that there are significant potential cost of capital benefits from the Combination.

·      Execution risk

The Assura Board states that: "with the benefit of its experience in conducting disposals and knowledge of the relevant private hospital market…[it] is concerned about the execution risk associated with the required size and timing of these disposals and the acceptability of the terms that might be available to the combined group especially under the PHP stated joint venture disposal structure"

PHP Response: Strong confidence in execution of deleveraging plan

The PHP Board is highly confident in its ability to deliver its stated disposal programme, having received strong interest and positive sentiment towards both primary healthcare assets and private hospital properties for the stated joint venture disposal structure.

Recent sales processes for private hospital portfolios have seen, and continue to see, strong interest from a number of potential acquirers, including in the process culminating in Assura's acquisition of its portfolio of private hospitals in the second half of 2024. Furthermore, the competitive situation for Assura and its joint venture with USS, which Assura entered into in 2024, demonstrate the weight of capital seeking to invest in healthcare real estate.

The PHP Board believes that strong investor interest in this asset class is underpinned by: (i) the long-dated inflation linked leases which provide greater certainty of rental growth (as the Board of Assura highlights in the Assura Announcement); and (ii) growing demand for private healthcare services and few  portfolios of scale, including as referenced by Assura's CEO Jonathan Murphy at the time of the acquisition of the hospital portfolio: "This represents a unique opportunity to participate in the growing demand for private healthcare services to help ease growing NHS waiting lists".

PHP has had preliminary discussions with a number of highly credible potential joint venture partners and based on these discussions, which the Board of PHP would expect to progress with in due course and in particular once fuller information is made available on the Assura portfolio, along with the favourable wider market conditions referred to above, the PHP Board is confident that it will be able to execute a transaction on acceptable terms, that would enable PHP to reduce its loan-to-value ratio to within its existing target range of 40 - 50 per cent. in the short-term.

·      Reduced exposure to long-dated, inflation-linked leases

The Board of Assura stated in its announcement on 11 June 2025 that "A combination with PHP, together with planned disposals of Assura's private hospital portfolio assets, would significantly dilute Assura shareholders' exposure to private healthcare assets, the majority of which benefit from long-dated inflation-linked leases which provide greater certainty of rental growth than OMR leases"

PHP Response: PHP's core focus is long-leased, primary healthcare assets leased to government tenants

The Board of PHP believe that the composition of the combined portfolio would deliver a higher exposure to state-backed income and would provide significant benefits for shareholders of the combined group, including:

Furthermore, the Board of PHP views the income profile and growth outlook of index-linked private hospital leases as similar to open market rent leases, particularly given caps and collars within the index-linked leases, whereby the rent is determined by the District Valuer with reference to inflation.

·      Integration risk

The Board of Assura has outlined in its announcement "the Assura Board believes these concurrent activities [portfolio sales, refinancing and realisation of synergies] would introduce heighted execution risk and operational disruption with corresponding financial uncertainty"

PHP Response: PHP is an experienced owner of primary care properties, with a track record of delivering integration plans and relative outperformance versus Assura on Total Property Returns in every reported full year since 2017

The Board highlights:

PHP remains ready to engage in dialogue with Assura to address their concerns and work towards the creation of a leading UK income focussed REIT, supported by a structural undersupply of modern primary care properties and favourable government policy.

The Board of Assura has also outlined in its announcement "while the Assura Board notes that CMA clearance is not a condition of the PHP Offer, Assura Shareholders would still bear a risk in this regard as an extended review would risk delaying PHP's disposal programme"

PHP Response: PHP has proactively notified the terms of the Combination to the CMA and has begun the process of pre-notification dialogue with the CMA. To date Assura has refused to provide the relevant documents directly to PHP, which could have the effect of unnecessarily delaying the regulatory clearance process

The PHP Board highlights:

PHP has sent to Assura a follow up request for cooperation by way of the early provision by Assura to PHP in the usual way of these documents and will continue to press the Assura Board to cooperate to assist PHP with the completion of its regulatory clearances. PHP continues to work diligently with the relevant authorities to ensure all necessary filings are made and the approvals obtained as quickly as possible.

A further announcement will be made when appropriate.

Assura shareholders are strongly advised to take no action in response to the Bidco Offer.

Enquiries:

CMS Cameron McKenna Nabarro Olswang LLP are retained as legal adviser to PHP.

The person responsible for arranging the release of this announcement on behalf of PHP is Toby Newman, Company Secretary.

Further information

N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for PHP and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than PHP for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement. This announcement is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction.

Numis Securities Limited ("Deutsche Numis"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for PHP and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than PHP for providing the protections afforded to clients of Deutsche Numis, nor for providing advice in relation to any matter referred to herein. Neither Deutsche Numis nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this announcement, any statement contained herein or otherwise.

The release, publication or distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 26.1 disclosure

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.phpgroup.co.uk promptly and in any event by no later than 12 noon on the business day following this announcement. The content of this website is not incorporated into and does not form part of this announcement.

Profit Forecasts and Estimates 

No statement in this announcement is intended to constitute a profit forecast or profit estimate, no statement in this announcement is subject to the requirements of Rule 28 of the Code and no statement in this announcement should be interpreted to mean that the earnings or future earnings per share of or dividends or future dividends per share of PHP and/or Assura for current or future financial years will necessarily match or exceed the historical or published earnings or dividends per share of PHP or Assura, as appropriate.