February 16, 2023 – On February 15, 2023, Steward Health Care Systems (“SHCS”) announced that it had entered into an agreement to sell its Utah operations to Commonspirit. This is an objectively bad deal for MPW, who have taken a 20% haircut on their Utah rent.
The sale by Steward is equally nonsensical. Steward and MPW management have consistently told select investors and analysts in the course of the preceding weeks that SHCS had its best EBITDA year and was FCF positive. Why has it sold its best asset at fire sale prices?
The real kick in the teeth is for MPW investors, who effectively paid for SHCS’s Utah assets and will see no money from its sale.