Assura in agreed bid for AH Medical

19th Jan 2011 15:42

Pharmacy and GP services supplier Assura has launched a recommended bid for AH Medical Properties (AHMP), the property investment company specialising in primary care assets.Assura is offering 0.85 shares for each AHMP, with a cash alternative of 40p per share, in a deal that values AHMP at about £28.3m.The terms represent a premium of 3.2% over the share price of AHMP on the day before the bid was announced, and a premium of 22.5% over the share price of AHMP on the day before Assura announced it was in bid talks with AHMP.Assura has received irrevocable undertakings to accept the offer in respect of some 76.2% of AHMP's existing issued share capital.To fund the cash alternative, Assura intends to raise around £11.4m (net) through an open offer, and about £12.0m (net) by means of a firm placing, which will result in the issue of 52.1m new Assura ordinary shares at 45p each."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," said Assura's chairman, Rodney Baker-Bates.Ashley House, the health and social care infrastructure specialist and a property partner of AHMP, has given its blessing to the union.Assura has entered into a number of arrangements with Ashley House whereby, Assura will buy three development properties from Ashley House. Assura will also grant a period of exclusivity to Ashley House to undertake due diligence into Assura's LIFT operations (but not investments).Furthermore, Assura has been granted right of first refusal to acquire all future projects developed by Ashley House for a period of six months.Conditional upon the offer becoming unconditional in all respects, Ashley House's existing asset management agreement with AHMP will be terminated. Ashely House said the completion of the offer would see over £4m in funds being paid to the company, thereby significantly improving its capital position, as well as providing it with a new larger development partner.