Wells Fargo is out with its report today on Nationwide Health Properties NHP, downgrading NHP to Market Perform.
In a note sent to clients, Wells Fargo writes, "Ventas announced that it intends to acquire all outstanding shares of NHP; the deal is valued at $7.4B or an approximately 6%+ initial yield. Deal terms call for NHP shareholders to receive 0.7866 shares of VTR. As a result, we are downgrading our rating on the shares of NHP as the shares will likely mirror the performance of Market Perform-rated VTR until deal closing (expected in Q3 2011). While we expect the deal to close ($175MM breakup fee), we anticipate maintaining estimates and a rating until then. NHP reported Q4 FFO of $0.60 per share. The result was a penny above our estimate. The surprise relative to our estimate was largely due to higher interest income and
lower G&A."
At the time of posting, shares of NHP were trading at $40.80, up 0.52% from Friday's close.
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