Doctors sometimes ask: who\u2019s been making that racket in the waiting room, with all this endless howling? And, at last, we have an answer. It\u2019s only KKR, Stonepeak, Jefferies and their legal pals from Simpson Thacher & Bartlett \u2014 all crying wolf. <\/p>\n
Who they? The two bidders and their advisers, who teamed up to offer \u00a31.7 billion cash for Assura \u2014 only to find themselves gazumped by a cash-and-shares bid from Primary Health Properties<\/a>.<\/p>\n It was a summer set-to that took the temperature of the London market: a cash-out from two financial buyers versus the chance to create a bigger healthcare real estate investment trust, with \u00a36 billion of properties housing more than 1,000 doctors\u2019 surgeries and private hospitals. <\/p>\n Shareholders sensibly plumped for PHP, rightly concluding that it was daft to cash out of a sector with so much political oomph behind it: \u00a329 billion a year extra for the NHS, plus a ten-year government plan to ease pressure on our hospitals via a shift to primary care. What better boost than that to the value of buildings housing GP surgeries, not least when the rents are effectively underwritten by the taxpayer?<\/p>\n Still, with the upfront financial difference between the bids slim, it was touch and go: an issue exacerbated by a chorus from the KKR\/Stonepeak crew<\/a> that Assura investors would be in need of heart surgery once the wonks from the Competition & Markets Authority had got their scalpels into PHP\u2019s bid.<\/p>\n The PHP boss, Mark Davies, had taken a calculated risk not to make the offer \u201cconditional\u201d on CMA approval. He expected scrutiny, of course, but reasoned that neither Assura nor PHP set their own rents \u2014 they\u2019re mainly done by a division of the HMRC\u2019s Valuation Office Agency. So, even if he grew the size of the estate, PHP would not be able to charge rip-off rents. <\/p>\n Maybe KKR and Stonepeak knew that, too. But that didn\u2019t stop them stirring things up over competition risk, including taking the unusual step of issuing two inflammatory stock exchange missives.<\/p>\n The first, in May, detailed the risks of a Phase 2 inquiry and how, under the \u201cEnterprise Act 2002\u201d, the CMA could \u201cprevent\u201d PHP acquiring shares in Assura. That, the duo warned, could leave Assura\u2019s \u201cshare price and valuation \u2026 materially negatively affected\u201d. Did Assura investors realise PHP was asking them \u201cto bear this risk\u201d? <\/p>\n It was the second, though, that was particularly priceless. Despite endless claims that the CMA could force disposals and other remedies on PHP, investors had made it clear they preferred its bid.<\/p>\n So, in August, on the eve of the deadline for acceptances, the duo and their key banking adviser \u2014 Philip Noblet of Jefferies \u2014 made a desperate, last-ditch attempt to keep their bid and his bonus alive. They issued a statement disingenuously titled \u201cUpdate following discussions with Assura plc board\u201d that was not only a blatant try-on but one so misleading that the Takeover Panel insisted on three corrections. This time they warned that the CMA had served \u201can initial enforcement order\u201d on PHP \u2014 despite that move being utterly routine. <\/p>\n Anyway, you ask, what happened? Well, PHP won the bid and the CMA has just \u201ccleared\u201d it. As Davies pointed out, it found \u201cno competition concerns\u201d whatsoever: news that pushed up PHP shares by 1 per cent to 94\u00bep, with the group now free to integrate Assura, aiming for at least \u00a39 million of annual synergies. As for the KKR bid team and Jefferies, they sheepishly declined to comment. Look out for them next time they cry wolf. <\/p>\n GSK\u2019s health check<\/p>\n Some drugs take a long time to work. Dame Emma Walmsley, the GSK boss, has just delivered her farewell figures. And guess what? The shares marked the occasion by closing up 6.5 per cent at \u00a317.52. Or just 76p higher than where they stood before she took charge in April 2017. <\/p>\n Put like that, the market\u2019s been tough on Walmsley. Her swansong third quarter had a familiar feel: upgrades to sales and profits guidance, with revenues up 7 per cent to \u00a38.5 billion and double-digit increases across the board, whether in HIV, respiratory, oncology, shingles or RSV drugs. On top, the pipeline\u2019s seen four new product approvals so far this year, not least Blenrep for multiple myeloma<\/a>. <\/p>\n \u2022 GSK\u2019s Emma Walmsley bows out on a high<\/a><\/p>\n