My view is that the rents were set too high in the first place to maximise the amount the Healthscope properties would be sold for. Private equity will always manipulate things to extract the maximum dollar possible. Sadly, HCW overpaid and rents may need to be cut by about 25% taking the distribution down to about 6 cents per annum. This is a yield of around 6.7% on the current price of 89 cents and seems fair and reasonable. Let's hope that the cut is not deeper.
HCW Price at posting:
89.0¢ Sentiment: Hold Disclosure: Held
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