Private Equity Cash Is No Longer King in UK M&A
Blackstone and KKR are facing competition from public companies in a stock market that used to roll over to offers to go private.
KKR has been rebuffed in is efforts to buy UK hospital operator Assura after a UK health-care real estate firm dangled a rival bid.
Photographer: Peter Macdiarmid/Getty Images
Two big-hitting US private firms are struggling with UK takeovers that would previously have been pushovers. The buyout industry should beware. Investors want alternatives to cashing out to private equity — and corporate bidders seem increasingly willing to provide them.
KKR & Co. has been trying to buy hospital operator Assura Plc, and had won the backing of the board for its £1.7 billion ($2.3 billion) cash offer. Another health-care real estate firm, Primary Health Properties Plc, dangled a rival bid giving Assura shareholders some cash plus shares in the enlarged company. The opportunity to stay invested in a bigger UK property portfolio was popular with the specialist real estate players among Assura shareholders. But both the certainty of KKR’s offer price and worries about PHP overstretching were initially obstacles to Assura switching sides.