Jefferies: HCP Real Estate Acquisition Could Be 5-10% Accretive To Estimates

Based on its own preliminary analysis, Jefferies estimates that the HCP, Inc. HCP deal could be “5-10% accretive to our 2011 and 2012 FFO/sh estimates.” “Our analysis assumes that: 1) the deal is closed at the end 1Q11; 2) the $3.3B bridge loan is financed at 5.5%; and 3) an additional 6M shares are issued to fund the balance of deal cost,” Jefferies writes. “However, we note that HCP will need to issue some equity post-completion of this deal to reduce its leverage ratio which we estimate will stand at ~48.4% vs. 40.3% at 3Q10 (consolidated debt-to-consolidated gross assets ratio).” Jefferies believes such an equity issuance will be further dilutive to earnings. HCP closed Monday at $32.52.