Investors Position for Continued REIT M&A After Recent Deals (HCN) (HCP) (AKR) (CDR)
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Price: $42.42 --0%
Rating Summary:
1 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 8
Rating Summary:
1 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 8
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The REIT sector is higher today after more deals in the space. This morning a $7.4 billion stock-for-stock takeover of Nationwide Health Properties, Inc. (NYSE: NHP) by Ventas, Inc. (NYSE: VTR) was announced. In addition, the Wall Street Journal reported that Blackstone Group (NYSE: BX) is looking to acquire Centro's U.S. retail mall assets for $9.4 billion.
Today's deals follows the January merger of equals between AMB (NYSE: AMB) and ProLogis (NYSE: PLD). The deals in the REIT space have investors looking at who could be next.
In the healthcare RIET space, Nationwide Health Properties' closest rivals are seeing notable action today on news of the deal. NHP's smaller peers, Healthcare Realty Trust Inc. (NYSE: HR) and Senior Housing Properties Trust (NYSE: SNH), are up 4% and 3%, respectively. The market could be viewing these smaller rivals as takeover bait following today's deal. NHP's larger peers, HCP, Inc. (NYSE: HCP) and Health Care REIT Inc. (NYSE: HCN), are 3% and 2% higher, respectively.
In addition to the healthcare RIET subsector, analysts at FBR Capital see self storage and retail as the only others able to "lend themselves to scales of economy from an operational perspective." They expect M&A to be concentrated in these three areas at this point.
In retail, the firm sees "public-public" M&A more likely in the shopping center sector, as opposed to malls. They think small players like Acadia Realty Trust (NYSE; AKR) and Cedar Shopping Centers (NYSE: CDR) are potential takeover targets. Cedar Shopping would be the most likely of the two, given its JV with RioCan the firm noted.
In self storage, the firm sees U-Store-It Trust (NYSE: YSI) and Extra Space Storage (NYSE: EXR) as attractive targets.
FBR Capital notes that the "not-so-hidden message" from all the recent deals is that management teams think their equity that their currency is "rich." Another lesson from the recent deals is that while the market expects larger companies to buy smaller companies, thus far this is not the case in the three major deals seen.
In all the deals, the moves signal that management of the buyer is bullish on a U.S. recovery.
Gauging today's action in the REIT sector, the Vanguard REIT Index ETF (NYSE: VNQ) is up 2.4 percent today.
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Today's deals follows the January merger of equals between AMB (NYSE: AMB) and ProLogis (NYSE: PLD). The deals in the REIT space have investors looking at who could be next.
In the healthcare RIET space, Nationwide Health Properties' closest rivals are seeing notable action today on news of the deal. NHP's smaller peers, Healthcare Realty Trust Inc. (NYSE: HR) and Senior Housing Properties Trust (NYSE: SNH), are up 4% and 3%, respectively. The market could be viewing these smaller rivals as takeover bait following today's deal. NHP's larger peers, HCP, Inc. (NYSE: HCP) and Health Care REIT Inc. (NYSE: HCN), are 3% and 2% higher, respectively.
In addition to the healthcare RIET subsector, analysts at FBR Capital see self storage and retail as the only others able to "lend themselves to scales of economy from an operational perspective." They expect M&A to be concentrated in these three areas at this point.
In retail, the firm sees "public-public" M&A more likely in the shopping center sector, as opposed to malls. They think small players like Acadia Realty Trust (NYSE; AKR) and Cedar Shopping Centers (NYSE: CDR) are potential takeover targets. Cedar Shopping would be the most likely of the two, given its JV with RioCan the firm noted.
In self storage, the firm sees U-Store-It Trust (NYSE: YSI) and Extra Space Storage (NYSE: EXR) as attractive targets.
FBR Capital notes that the "not-so-hidden message" from all the recent deals is that management teams think their equity that their currency is "rich." Another lesson from the recent deals is that while the market expects larger companies to buy smaller companies, thus far this is not the case in the three major deals seen.
In all the deals, the moves signal that management of the buyer is bullish on a U.S. recovery.
Gauging today's action in the REIT sector, the Vanguard REIT Index ETF (NYSE: VNQ) is up 2.4 percent today.
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