Primary Health Properties (PHP) has offered a combination offer for Assura, valued at approximately £1.5bn.

Under the offer, Assura shareholders would receive 0.38 new PHP shares and 9.08 pence in cash per share.

PHP’s offer represents a premium of 23.6% on the healthcare property REIT’s closing share price on 13 February, with Assura shareholders holding 48% of the combination’s issued share capital if the deal goes ahead.

The board at PHP said that the combination of the firms would create a "UK REIT of significant scale" and a "specialist of greater scale in a growth sector" with a combined £6bn portfolio.

The firm added that it believes that the combination represents a "highly compelling proposition for Assura’s shareholders at a significant premium".

The offer comes after the US private equity firm, KKR, offered £1.61bn for Assura last month.

Head of property research at Quilter Cheviot, Oli Creasey, said: "The bid by PHP looks like a calculated risk. The pricing is not competitive with the KKR bid at face value, but the company may be hopeful that enough shareholders are open to accepting a slightly lower price in exchange for the share capital remaining in a listed vehicle. Neither bid is formally on the table as of today, but were they to both materialise shareholders would have a difficult decision.

"To accept the KKR bid would mean having to find a new home for the money, and with PHP and Assura shares both still offering a dividend yield in excess of 7%, some may argue that the long-term prospects are greater than the cash in hand. While some investors may be tempted to take the cash and reinvest in PHP, the company simply isn’t large enough for everyone to follow suit."

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