Seniors Housing Weekly Update: Advocat Still A No While Sun Healthcare Says Yes

June 26, 2012


 

June 26, 2012. 60 Seconds with Steve Monroe. Despite a much more generous offer, the board of Advocat continues to ignore Covington's offer even while the board at Sun Healthcare agrees to be purchased by Genesis HealthCare......

 

Advocat Still A No While Sun Healthcare Says Yes
It has been nearly two months since Covington Investments made its unsolicited offer, at a nearly 100% premium, to buy all the shares of Advocat in a deal valuing the equity at $50 million. The offer has been rejected with little discussion. Since then, however, Sun Healthcare agreed to be purchased by Genesis HealthCare in a deal valued at $275 million that came with a 38% premium to Sun’s share price. Sun leases all its properties, and Advocat leases most of its properties. And while the similarities pretty much stop there, we wonder what the board at Advocat sees for the future of a smallish skilled nursing operator that the board of Sun Healthcare did not see for what is a much larger company. The owners of Genesis obviously see a future where real estate ownership matters less than a solid operating platform, and the importance of being the low-cost, high-quality producer in an environment that will need to be driving overall health care costs down. That $8.50 a share offer is still looking pretty good.

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Kindred Healthcare and Ventas

Does anyone know who is in the running to buy the Skilled Nursing Facility Bundle that Kindred Healthcare is not going to release from Ventas? What are the rumors?

Kindred and Ventas

I have not heard who might be in the running, but Ventas is trying to find a new tenant (or tenants) as opposed to finding a buyer because it wants to keep the rental income and believes that Kindred's rents are close to current market rents.

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