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.
Nursing home chain Advocat has signed a lease to reopen a facility in western Kentucky that closed a year ago after it was decertified by the Centers for Medicare and Medicaid Services. The Brentwood-based company has an option to buy the 88-bed center in the next five years.
The California State Teachers' Retirement System is asking shareholders of National Health Investors to vote for its proposal to have unopposed director candidates require a majority of votes cast in order to get on or stay on the company's board. CalSTRS says a change from the plurality vote system would put Murfreesboro-based NHI in line with a majority of S&P 500 companies. NHI's board isn't taking a stance on the proposal.
While the Board of Directors does not believe this proposal would increase accountability given the fiduciary duties to which each director is already subject under Maryland law, the Board of Directors understands that the majority voting standard would provide some shareholders a level of comfort. This proposal will provide shareholders with an opportunity to express their views on this topic.
Separately, NHI's board also is asking shareholders to hike the number of common shares authorized to 100 million from 40 million. The company (Ticker: NHI) currently has about 28 million shares outstanding.
John Rijos, co-president and COO of Brentwood-based Brookdale Senior Living, last week sold almost $900,000 worth of his shares in the company. Brookdale stock (Ticker: BKD) has climbed almost 40 percent in the past three months. Rijos still owns about $10 million worth of the company. Separately, Executive Vice President Gregory Richard unloaded almost $200,000 of stock.
- BRASWELL, ROBERT
- GARRETT, JOHNNY C EXECUTOR; GARRETT, JOHNNY C IV EXECUTOR; GARRETT, ANN BIGGER ESTATE; GARRETT, TIMOTHY M EXECUTOR
- GARRETT, TIMOTHY M EXECUTOR; GARRETT, ANN BIGGER ESTATE; GARRETT, JOHNNY C EXECUTOR; GARRETT, JOHNNY C IV EXECUTOR
- GARRETT, JOHNNY C IV EXECUTOR; GARRETT, JOHNNY C EXECUTOR; GARRETT, ANN BIGGER ESTATE; GARRETT, TIMOTHY M EXECUTOR