Shares of Brookdale Senior Living popped more than 7 percent in early Wednesday trading after Health Care REIT said it would spend about $850 million to buy Sunrise Senior Living. The stock (Ticker: BKD) retreated a bit before surging some more. At about noon, shares were changing hands well above $21 for the first time since July of last year. They concluded the day at $22.08. Smaller competitors Advocat (Ticker: AVCA) and National HealthCare (Ticker: NHC) ended the trading session up about 5 percent and down about 2 percent, respectively.
National HealthCare Corp. said it will invest almost $11 million to build a 90-bed skilled nursing and rehabilitation facility in Tullahoma. The complex, which will employ about 100 people when full, is set to open its doors around this time next year.
National Health Investors has paid $25.2 million for a 138-unit senior living community in Silverdale, Wash., and lent another $3.5 million to Sante' Partners, the Oregon-based tenant of the facilities. NHI’s acquisition won’t be final until later this week. The deal was funded by the Murfreesboro-based company’s existing loan agreements and is subject to state licensing acceptance before ownership changes hands.
“This very attractive acquisition contributes to NHI’s goal of diversifying our portfolio. We are delighted to expand our relationship with Sante’ Partners,” Justin Hutchens, NHI president and CEO, said in a release.
The investment group seeking to take over Advocat is pressing the nursing home chain's investors to get in touch with their directors and executives about the recently announced buyout of Sun Healthcare by privately held Genesis HealthCare. Covington Health Group says its bid for Advocat is even better than the Sun Healthcare deal.
The Blakeford at Green Hills retirement center plans to sell almost $31 million of debt in the coming weeks. Proceeds of the offering will go toward retiring the facility's 1998 series of debt as well as refinancing its loan with Bank of America and funding some capital improvements. In giving the planned debt a BBB rating, Fitch analysts say the center booked 2011 revenues of almost $18 million and posted an adjusted operating margin of 27.9 percent.
Because of a focus on strengthening operations, The Blakeford has generated year-over-year improvement in operating performance over the last three fiscal years despite a difficult operating environment. Operating ratio of 87% in fiscal 2011 is improved from 93.2% in fiscal 2010 and 99.6% in fiscal 2009 and compares favorably to the 'BBB' category median of 97.4%.
Shareholders of Brookdale Senior Living, who have seen their investment lose a quarter of its value in the past year, last week very nearly voted down the re-election of director and former CEO Mark Schulte. At the nursing home chain's annual meeting, Schulte — who stepped down as co-CEO in early 2008 — received just 50.9 percent of the votes cast for or against last week, while fellow directors Jeff Leeds and Sam Waxman both got more than 74 percent.
The directors of nursing home operator Advocat formally responded to the publicly announced buyout bid from Georgia-based Covington Health Group by saying the offer doesn't take into account the company's investment in growth and plans to add to its properties. In addition, they say, the market is undervaluing the senior living sector as a whole, so this really isn't the right time to seriously consider a sale.
But the biggest sign that Covington's bid may not go anywhere soon: The board's largest shareholders, Wallace Olson and Chad McCurdy's Marlin Capital, have closed ranks. Combined, the two own more than 29 percent of Advocat's stock (Ticker: AVCA).
As noted above, two of our significant shareholders met with you solely in their role as shareholders of the Company. Based on conversations with those shareholders following that meeting, the Board believes that those shareholders are not interested in selling their shares at the proposed price. While we acknowledge that those shareholders do not speak for all shareholders, we believe they serve as useful proxies for the views of many of our shareholders, and the significance of their ownership position has bearing on the likelihood that your proposal could be successfully concluded.