BTIG Keeps Medical Properties Trust (MPW) at 'Neutral' Amid Steward Investment; Says Questions Remain
- Wall St. opens higher as M&A activity boosts confidence
- AT&T (T) to Acquire Time Warner (TWX) for $107.50/Share
- Rockwell Collins (COL) to Acquire B/E Aerospace (BEAV) for $6.4B
- TD Ameritrade (AMTD) to Acquire Scottrade in $4B Cash & Stock Deal
- Pre-Open Stock Movers 10/24: (BEAV) (JPEP) (HLT) Higher; (BAS) (INO) (ADRO) Lower (more...)
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
BTIG affirms Medical Properties Trust (NYSE: MPW) at Neutral amid plans to invest $1.25 billion in Steward Health Care System-operated acute care hospitals.
Analyst Mike Gorman commented,
With an estimated cash yield of 8.2% and GAAP yield of 10.1%, the deal should be immediately accretive on a stabilized basis and provides diversification benefits. However, we are generally wary of health care REIT acquisitions from private equity sponsored entities. Moreover, depending on timing the deal could be dilutive to 2016, and MPW still needs to place a substantial amount of long-term debt.
While the transaction carries potential benefits, we have additional questions. To begin, does Steward/Cerberus intend to use the proceeds for reinvestment or is the deal partially a cash-out? What benefits come from structuring the deal as a 50/50 asset purchase and mortgage loan? How much income will MPW’s minority investment generate? What are Cerberus’ plans for its $150 million investment in MPW shares?
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- BTIG Starts Fulgent Genetics (FLGT) at Buy
- Wedbush Raises Price Target on Citizens Financial Group (CFG) Following 3Q EPS Beat
- KLR Group Raises Price Target on SM Energy (SM) to $59; Reiterates Buy
Create E-mail Alert Related CategoriesAnalyst Comments
Related EntitiesCerberus Capital, BTIG
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!