Medical Properties Trust Sells Majority Interest Surges 20%Medical Properties Trust, Inc. ( MIL:MPT ) has announced that it recently divested its interests in five Utah hospitals to a newly formed joint venture with an investment fund. The fund, affiliated with a leading institutional asset manager, has acquired approximately 75% interest in the venture, while MPT has retained an approximate 25% interest. The sale transaction has generated approximately $1.1 billion of immediate cash proceeds to MPT before costs and reserves, bringing total liquidity transactions year-to-date to $1.6 billion, which is 80% of MPT's initial FY 2024 target.
The proceeds from the sale are expected to be used to reduce outstanding debt, including the repayment of borrowings under its revolving credit facility and payment in full of the approximate $300 million Australian term loan due in 2024. In addition, the funds will be utilized for general corporate purposes.
The Utah lessee, an affiliate of CommonSpirit Health, has the right to acquire the leased real estate at a price equal to the greater of fair market value and the approximate $1.2 billion lease base at the fifth or tenth anniversary of the 2023 master lease commencement. MPT has granted certain limited and conditional preferences to the fund based on the possible exercise price of the lessee's purchase option.
MPT's Chairman, President, and CEO, Edward K. Aldag, Jr., stated that the company's approach to underwriting hospital real estate has been validated by highly sophisticated third-party participants in a broadening private market for real hospital assets. He emphasized that the primary focus of MPT is on accelerating its capital allocation strategy, and he expressed confidence that the company will exceed its initial target of $2.0 billion in liquidity transactions in 2024, based on the valuations achieved on recent transactions and the terms actively being negotiated for additional transactions.
Technical Outlook
Medical Properties Trust ( NYSE:MPW ) stock is trading above the 200-day Moving Average (MA) with a Relative Strength Index (RSI) of 67.43 indicating a bullish sentiment within the overbought territory. The stock is up by 20% in Monday Market trading.
