Shares of Medical Properties Trust (NYSE: MPW) soared 18.8% on Monday after the healthcare facilities-focused real estate investment trust (REIT) announced a big asset sale.
Medical Properties Trust proclaims an unlimited Utah deal
Late Friday, the company said it had sold its interests in five Utah hospitals to a newly formed three way partnership with an investment fund for $886 million. Medical Properties Trust has retained a roughly 25% interest throughout the three way partnership, while the fund purchased a 75% stake. The three way partnership also placed latest non-recourse secured financing simultaneous with the closing of the sale, giving Medical Properties Trust $190 million of more money. Altogether, the deal generates roughly $1.1 billion of total money proceeds to Medical Properties Trust.
What’s next for Medical Properties Trust investors?
Medical Properties Trust said the proceeds will likely be primarily used to in the reduction of outstanding debt, including payment in filled with its $300 million Australian term loan due this 12 months and repayment of borrowings under its revolving credit facility.
The news came only just just a few days after Medical Properties Trust announced the sale of 5 facilities in California and Recent Jersey to Prime Healthcare for $350 million. Lower than three weeks ago, Medical Properties Trust also rallied after its single largest tenant, beleaguered hospital operator Steward Health Care, announced a separate deal to divest its nationwide physician network to a subsidiary of UnitedHealth. Steward Health owed Medical Properties Trust a whole of $50 million in unpaid rent as of the tip of 2023.
Ultimately, investors are rightly celebrating as Medical Properties Trust works to selectively divest assets and clean up its balance sheet. Considering this beaten-down stock’s dividend payout currently yields around 12.7% annually, it will well prove to be a solid value for those investors willing to bet it must have the flexibility to revive the business to a more regular state within the approaching quarters.
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Steve Symington has no position in any of the stocks mentioned. The Motley Idiot recommends UnitedHealth Group. The Motley Idiot has a disclosure policy.
Why Medical Properties Trust Stock Popped Today was originally published by The Motley Idiot