Ronald Orol at The Street says activist investor Sandell Asset Management appears to hold a strong hand in its dealings with Brookdale Senior Living, which it wants to spin off its real estate. The New York-based investment firm, Orol writes, plans to add to its board presence next spring to try to force such a transaction unless Brookdale's directors act before then. And the pieces are in place for such action — as are two deep-pocketed potential buyers.
For HCP and Ventas, an acquisition of Brookdale or its assets would prevent the formation of a new rival. Any move by Brookdale to spin off its massive real estate holdings into a free-standing REIT would create new competition for HCP and Ventas in the health care REIT industry, people familiar with Sandell argue.
Goldman Sachs analyst Brian Zimmerman has begun covering shares of Brookdale Senior Living with a 'buy' rating. He sees the stock, which closed at $36.87 (Ticker: BKD) and is flat year to date, climbing to $45 in the coming year. Among the seven analysts tracking the Brentwood-based company, the median price target is $44.
Shares of Brookdale Senior Living are holding on to the gains they put up yesterday after a DealReporter story that the company's executives are in talks to spin out its real estate to either HCP or Ventas. The move comes as Brookdale investor Sandell Asset Management continues to pressure CEO Andy Smith and his team to wring more value out of the company's properties.
Brookdale and HCP are far from strangers, having worked together on several big deals in recent years. Nor is Ventas an unknown entity: In 2010, it bought Atria Senior Living in a $3.1 billion deal, and its leaders this week said they plan to buy Ardent Health for $1.8 billion.
An hour into Thursday trading, Brookdale shares (Ticker: BKD) were up about 0.3 percent to $38.38. Yesterday, they popped 3.5 percent to their highest level since October of 2007.
Glenview Capital, the hedge fund that has made big bets on health care companies in recent years, appears to be a big fan of Brookdale Senior Living. The firm on Monday filed papers with the Securities and Exchange Commission to say it now owns 11.6 million Brookdale shares. That's up from 4 million shares last summer and amounts to 6.3 percent of the Brentwood-based senior care giant, whose shares (Ticker: BKD) are up about 5 percent year to date.
POSTDATA: WARRANTY DEEDS