Medical Properties Trust (NYSE: MPW) stock soared following the announcement of the sale of its controlling stake in five Utah Hospitals.
The Medical Properties Trust (MPW) has announced the completion of the sale of its interests in five hospitals in Utah. This move has significantly bolstered its financial position.
The joint venture transaction with an investment fund tied to a leading institutional asset manager has generated an estimated cash inflow of $1.1 billion for MPT before expenses and reserves.
The company has offloaded around 75% stake in the venture for $886 million while holding onto a 25% interest. MPT’s underwritten lease base, valued at around $1.2 billion, receives affirmation from this action. In addition, it aligns with their capital allocation strategy.
MPT plans to use the proceeds from this deal to repay debts, including settling a due $300 million Australian term loan in 2024 and meet other corporate financial obligations.
Edward K. Aldag Jr., the Chairman, President, and CEO of MPT, voiced his confidence in the company’s strategy and highlighted the private market’s recognition of the value of real hospital assets. He noted that based on recent valuations and ongoing negotiations for additional transactions, MPW is on course to surpass its initial 2024 liquidity transaction target of $2.0 billion.
MPT Completes Sale of Utah Hospitals
The agreement also incorporates new non-recourse secured financing for the venture, which adds an extra $190 million to MPT’s share of the proceeds, further validating the underwritten asset values.
The deal terms offer the Utah lessee, associated with CommonSpirit Health, the option to buy the leased real estate at either higher of fair market value or the lease base at specified anniversaries of the 2023 master lease commencement.
Eastdil Secured, L.L.C. served as the financial advisers for this transaction, with legal counsel provided by Goodwin Procter LLP and Baker Donelson PC.
Moreover, the board of directors of the company declared a regular quarterly cash dividend of 15 cents per share of common stock, payable on May 1 to stockholders on record as of April 22.
Medical Properties Trust (NYSE: MPW) Stock Reaction
MPW stock surged 18.80% to $4.74 on Monday. The traders had exchanged hands with 56,457,844 (56.45 million) shares compared to the average daily trading volume of 20.05 million.
