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Investing.com - Deutsche Bank reinstated coverage on Primary Health Properties Plc. (LSE:PHP) with a Buy rating and a price target of GBP1.14 following regulatory approval of the company’s merger.
The reinstatement comes after the Competition and Markets Authority (CMA) Phase 1 approval of the PHP-AGR merger, with no referral to Phase 2 investigation required.
Deutsche Bank notes that in an environment of structurally higher interest rates and a real estate sector lacking capital growth-driven net tangible asset stories, high-quality income-driven returns like PHP’s are particularly valuable.
The bank highlights that the PHP-AGR combination merges PHP’s "superior total property returning model" with AGR’s development expertise and exposure to the growing private healthcare market, while also benefiting from operational and financial cost synergies.
Deutsche Bank projects 6% earnings per share accretion for PHP by fiscal year 2027, assuming the full £9 million of synergies is realized, adding that "more economies of scale are possible."
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