MPW Case Study – Tenet Florida Hospitals

Author: Viceroy Research Published on: February 15, 2023 Published in: Medical Properties Trust NASDAQ:MPW

February 15, 2023 – MPW’s purchase of 5 Florida Hospitals in 2021 was another Steward subsidy at MPW shareholder’s expense. This report investigates the uncommercial nature of this transaction.

The acquisition of the Florida Hospitals forms part of Steward’s greater $1.1b acquisition of Tenet Healthcare’s Southeast Florida hospitals and operations. MPW’s $900m section of the purchase meaning Steward only had to put forward ~$200m.

The Florida Hospitals were held-for-sale in Tenet’s 2021 financial accounts, valued at only $371m. The 2022 appraised values for the same hospitals are ~70% below MPW’s outlay.

The Florida Hospitals generated annualized income of $68m as at Q2 2021. This appears to make the purchase a great investment for Steward at their $200m outlay. MPW, on the other hand, have paid $900m for $371m in assets, 2.41x fair value.

MPW is effectively subsidizing Steward’s return on investment at the expense of its own shareholders.

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