Primary Health Properties (PHP) has acquired a £233m portfolio of doctors' surgeries, expanding its gross assets by about a third. The deal involves PHP paying the seller, surgery developer Prime, £41.1m in shares (newly issued at 320p) and assuming £178m of debt.
IC TIP:
Sell
at
334p
Once the deal is refinanced at lower interest rates - which will involve debt cancellation fees of about £14m - it should increase PHP's dividend cover to roughly 90 per cent. The company has also secured first right of refusal on Prime's developments for a period of five years, potentially accelerating its acquisition pipeline.
