The UK competition watchdog has launched an investigation into the proposed takeover of NHS landlord Assura.
Last month, rival healthcare property firm PHP (Primary Health Properties) put forward a fourth takeover offer for Assura worth £1.79 billion following a lengthy bidding war.
PHP had previously laid down a £1.68 billion bid in May but was outbid by a rival suitor, with a consortium led by US private equity firm KKR valuing the business at £1.7 billion.
Bosses at Assura backed the £1.79 billion deal, suggesting the increased scale of the combined business would benefit shareholders of both companies.
On Friday, the Competition and Markets Authority (CMA) said it has now launched a “phase one” investigation into the deal.
It said the companies and others potentially impacted by the deal have two weeks to provide submissions regarding the move.
The regulator said it is looking at whether the takeover “may be expected to result in a substantial lessening of competition” in the healthcare sector.
Following submissions, the regulator will then decide whether the deal needs to go to a more thorough phase two probe.
PHP’s rival bidder KKR had cautioned that the deal, which is combining the two largest UK healthcare real estate firms, could attract scrutiny from the CMA.
Assura owns more than 600 buildings, including doctors’ surgeries, with a portfolio valued at around £3.1 billion. It has about 80 members of staff.