KKR threat to NHS landlord: Don't give the barbarians a foothold in a sacred public service, says ALEX BRUMMER

Daily Mail​

a day ago

Freed from the proposed £4billion rescue of Thames Water, private equity barons KKR have come fizzing
back with an upgraded offer for NHS and private healthcare landlords Assura.
KKR's latest and final bid of £1.7billion is only marginally better than that from listed rival Primary Health Properties (PHP) but is being recommended by Assura's board.
The battle isn't necessarily over, with PHP still looking at options and claiming Chancellor Rachel Reeves's bonanza spending on the NHS as an ally.
As has become customary when listed companies seek to vanish from the London stock market, there is extensive waffle from Assura about careful evaluation and fiduciary duty.
The latter is investment banker-speak for running up the white flag. In cash terms, the KKR offer, at 52.1p a share, is barely better than the 51.7p bid from PHP.
A 39 per cent premium may seem wonderful but given the depressed state of share valuations in London and a recent tech offer with a 96 per cent premium, the KKR deal is hardly effervescent.
There is no obligation for Assura to accept either deal. A braver board would have told the private equity plunderers to get lost. Instead, it chose to disparage the alternative 'merger' with PHP, claiming financial and execution risk.
The board also argues that the PHP offer would diminish Assura's efforts to support investment in the NHS estate.
Who is Assura kidding? KKR fears too much exposure to regulated British assets and the political risk which comes with it as we learned when it pulled out of the near-complete Thames Water deal.
Assura also needs to remind itself of how private equity works. Load up target companies with debt, squeeze costs, do some clever financial engineering with the leverage, raise prices or rents and head for the hills.
A Government which better understood how highly indebted deals work might be cautious.
A reading of the Competition & Markets Authority's work on veterinary services, revealing how the cost to pet owners and farmers has escalated, illustrates the dangers. More market-based private medicine in the UK eases pressure on the NHS.
But allowing the barbarians a foothold in a sacred service is unacceptable even if it's wrapped up with tinsel and a bow.
Sign of the Zodiac
This week's pandemic of bids for Britain's tech crown jewels and skin care specialists rightly has been accompanied by much handwringing.
How is it that companies born and bred in UK science and tech struggle to develop into national champions?
After all, the City is second only to New York as a financial centre and is home to one of the world's biggest collection of banks and a strong venture capital industry. There ought to be no bars to start-ups or smaller listed firms accessing capital.
Freeing up pension funds, allowing them to be more adventurous, ought to help. But swift market access to funding and liquidity is the key.
That is why the launch of Pisces, the London Stock Exchange's platform for 'intermittent' capital, a place to come to raise funding and then vanish behind a privacy wall, is an important innovation.
Stock exchange group boss David Schwimmer has been promoting the concept for years but freeing it from the weeds of regulatory bureaucracy is not easy.
The insistence on broad-based disclosure rules threatened to sideline it. So it is good to learn that the Financial Conduct Authority, in keeping with the growth agenda, has dropped onerous transparency requirements on the environment, shareholder transactions and director pay.
These threatened to strangle Pisces at birth. Let the fundraising begin before the rush to the door of UK tech and AI becomes a stampede.
Peer pressure
It has become something of a thing for Chancellors to name-check colleagues when delivering grand financial statements to the Commons.
Rachel Reeves set a record with her pledges to spend, spend, spend in Labour constituencies in the North, Midlands, Scotland and Wales.
Lonely Weymouth was the only southern town to receive much of a mention. Unlike Southport, it already has a serviceable pier.