Goldman Sachs said that while it expected a transaction with HCR ManorCare due to HCP, Inc.'s HCP significant debt investment, “we believed the timing of any deal would be closer to the associated debt's maturity in 2012/13.”
That being said, Goldman Sachs writes, “the potential reinvestment of HCP's $1.7 billion investment (about 14% of assets) at an attractive yield and both the size and complexity of the transaction highlight HCP's ability to source attractive growth opportunities.”
Goldman Sachs' questions include:
(1) Real estate values today vs. 2007, the peak of the cycle
(2) Does HCP plan to invest in the operating company or even take a larger position?
(3) How much growth in EBITDA does HCP expect over time?
HCP currently trades at $33.78.
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