Q: Hi 5i,
What happens to NWH stock price if the UK sale does not happen?
What happens to the price if the distribution is cut.
Thanks
John
What happens to NWH stock price if the UK sale does not happen?
What happens to the price if the distribution is cut.
Thanks
John
5i Research Answer:
In mid-May NWH indicated the UK deal is 'progressing well' and is expected to close before June 30. It, along with asset sales, is expected to raise $550M for the company, to reduce debt. Investors are concerned about the distribution, and if these events do not happen we would expect units to decline 5% or more. The distribution cut question is more difficult. At a 10%+ yield and at 10X cash flow, investors are likely expecting the worst anyway. A cut we think would take units down 5% to 10% initially, but the drop may be short-lived.