During the extended trading period, Medical Properties Trust, Inc. (NASDAQ: MPW) observed a resurgence in its stock valuation, marking a notable uptick of 12.28% to attain $4.48. This rebound offset the preceding loss of 2.45% during the regular session, concluding at $3.99. The announcement of an asset divestiture and dividend disbursements served as catalysts for the post-market surge in MPW shares on the US stock charts.
Medical Properties Trust (MPW) disclosed the sale of its stakes in five Utah-based hospitals to a recently established joint venture (JV). The formation of this JV involved an investment fund associated with a prominent multi-strategy, institutional asset manager with a significant history in real estate investments.
Retaining an approximate 25% stake in the JV, Medical Properties conveyed about 75% to the Fund for $886 million, affirming the underwritten lease base of approximately $1.2 billion for MPT. Simultaneous to the closure of this sale, the JV secured new non-recourse financing, infusing $190 million in cash to Medical Properties, reinforcing the underwritten asset valuations.
Collectively, these transactions generated around $1.1 billion in immediate cash proceeds for Medical Properties, prior to expenses and reserves. The anticipated utilization of these funds includes debt reduction, encompassing the full payment of the approximately $300 million Australian term loan maturing in 2024 and the repayment of borrowings under its revolving credit facility, along with meeting general corporate requirements.
As previously disclosed, the lessee in Utah (an affiliate of CommonSpirit Health) holds the option to acquire the leased real estate at either fair market value or the approximate $1.2 billion lease base on the fifth or tenth anniversary of the 2023 master lease commencement. Medical Properties extended certain limited and conditional preferences to the Fund based on the potential exercise price of the lessee’s purchase option.
Moreover, in a separate press release, Medical Properties declared a regular quarterly cash dividend of $0.15 per common stock share, slated for payment on May 1, 2024, to shareholders of record as of April 22, 2024.
