The biggest negotiating point will be rent. The receiver will have to ask Healthscope’s two big landlords – HMC Capital’s Health Co Healthcare and Wellness REIT and NorthWest Healthcare Properties REIT – to take a haircut just like Brookfield ($2 billion down) and lenders.Expect the landlords to kick and scream, but deep down, they know what the rest of us also know: those rental agreements that Healthscope signed in 2019 do not stack up in the current market. Times have changed and a hospital operator of Healthscope’s size cannot sustain $200 million a year rent.The fact that Brookfield is gone – and will be the biggest loser in terms of dollars – may help reset negotiations.When due diligence heats up, La Spina reckons bidders will find they’re looking at “the most efficient hospital operator” in the country. He says he’s part of the package should a new owner want to keep him and, with a doctor son and a registered nurse daughter, says his heart is in the right place.
HCW Price at posting:
84.0¢ Sentiment: Hold Disclosure: Held
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