Seniors Housing Weekly Update -- The AdCare Saga Goes On

May 21, 2013


May 21, 2013. 60 Seconds with Steve Monroe. No restated financial results, no current financial statements and no tender offer from Chris Brogdon.

The AdCare Saga Goes On

So what’s it going to be? Is Chris Brogdon going to take control of AdCare Health Systems for $8.00 per share? Is AdCare going to file its restated quarterly reports for 2012 any time soon? Are these two issues related? As you know, Mr. Brogdon has delayed his pending tender offer due to a need for closer scrutiny of Ohio takeover laws. It is a bit amateurish that this was not looked into before his grand announcement, and we have to wonder who he is getting advice from. But how can shareholders make a decision on what the company’s shares may be worth without the restated 2012 financial results, let alone anything from 2013, which has also been delayed. After peaking at $6.26 per share after the tender offer announcement, the shares have dropped by about 25% in value, and keep on dropping. No one knows how he derived the $8.00 value, and apparently fewer and fewer shareholders believe it will ever come to pass. Count us in on that opinion. But we would not be surprised to see a lower offer given all the uncertainty.



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While I am not an equity analyst, if you think Chris Brogdon is going to go through with his tender offer at $8.00, or even $7.00 per share, it is a buy right now, because even though the proposed tender offer is not for the entire company, if he does it the shares should rise in price when he starts the process. If you think that the whole tender offer concept is going to go away, at least for many months, then I would not buy the stock at its current level until all the financial statements have been released. Even then, because of its small size and recent growth, it is a difficult company to value and one probably not worth the risk. If he comes out canceling the tender offer idea, then watch out.


Where is AdCare stock a buy?

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