MPW now halted as they respond to the WSJ article -
Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE: MPW) today responded to the most recent of several false and misleading articles published by the Wall Street Journal, in this case related to the Company’s May 23, 2023 transaction with Prospect Medical Holdings (“Prospect”).
While MPT engaged with the author, Jonathan Weil, to ensure full awareness of all the facts surrounding this transaction and the Company’s investment in PHP Holdings LLC (“PHP”), Mr. Weil decided to wholly disregard this information in the article that was published. Importantly, the Wall Street Journal proceeded with publication before Prospect was able to provide necessary clarifications, even though Prospect indicated it intended to do so and the article itself acknowledging the extraordinary disruption and distraction that Prospect is currently dealing with following a ransomware attack.
As such, MPT believes it is important to clarify the following facts for the investment community:
The California Department of Managed Health Care’s (“DMHC”) hold sent to Prospect on July 20, 2023 is a standard, expected, and non-controversial part of the approval process for this transaction.
This hold indicates that certain additional information is required prior to the issuance of final approval from the DMHC, which the Company fully expects to obtain in due course as it has been advised it is highly unlikely the regulators would not approve a transaction following receipt of all required information.
In the unlikely event that the regulator does not grant approval for the transaction, MPT’s investment in PHP would remain a convertible note with identical economics to equity ownership.
As a result, DMHC’s request was deemed immaterial to MPT’s financials and thus did not require disclosure.
The Company’s recording of its $68 million equity investment as revenue in the second quarter was fully consistent with accounting requirements and was entirely unrelated to the DMHC approval process. Mr. Weil’s attempt to conflate the two matters has no basis in fact.
Amid a continued chorus of intentionally deceptive claims being perpetuated by individuals with a clear financial incentive to do so, MPT also believes it is notable that the publication of this article coincides with both market hours and the expiration of equity put options which settle on the third Friday of every month. MPT remains focused on creating long-term value for shareholders through its investments in hospital real estate and refuses to be distracted by the continued spread of misinformation.
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