Looking at the Emeritus Ventas Deal done today Dec 22,2008 :62.5 million for 432 units thats approximately (62.5 /432) = 144,676 USD per unit as sale price..
http://www.reuters.com/finance/stocks/keyDevelopments?symbol=VTR.N×tamp=20081222201500&rpc=66
SRZ had 54,000 units 261 ownership and 178 managed ie (54,000/(261+178))*261 = 32,104 ownership interest units.
Considering the same rates as Emeritus deal (32,104*144676) = 4.64 Billion USD
Considering ownership interest as just 51% holding instead of 100% ie 0.51*4.64 =2.368Billion USD considering prevailing market rates.. (Dec 22,2008)
Considering all liabilities (1.292Billion) we still have (2.368 - 1.292) = 1.076 Billion USD as residual value
Even 50% off is 538million which is 8.59 times current value ie (8*1.22) = 10 USD per share..
This is just property .. not included is brand and other non tangible assets such as premier locations, market share and 178 managed property locations.
Already included is a 50% off and all liabilities have been payed off and ownership consideration of 51% instead of 100% value.
Thus the strip down value is 10USD for Sunrise Senior Living(SRZ)
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4 comments:
Seems logical, and very conservative. I will hold on to my shares at this point, and maybe add some more on the refi news. My current price per share is .92. Good thoughts.
Thanks for crunching the data. In this recession, nursing home operators have an advantage in obtaining financing since their incomes hold up well. This ability to have steady future cash flows makes Sunrise a compelling investment in my opinion. Thanks again for your detailed posts.
>>Even 50% off is 538million which is 8.59 times current value ie (8*1.22) = 10 USD per share..
I did not quite catch how you arrived at the number 8.59. I know the numbers would have changed now. But just wanted to know the concept.
Raj:
538million / Market Cap = 8.59
8.59 * Market Price= 10
It would have been easier just saying 538 million/No of Equity shares = $10
=happy investing
WhatsupPrahalad
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