NASHVILLE—Following reports earlier this week that Brookdale Senior Living (BKD) was in early discussions about a sale of some or all of the company, shareholder Land and Buildings Investment Management reiterated its claim that the company's stock is undervalued. “We believe the company's net asset value is at least $25 per share, including owned real estate worth in excess of $21 per share,” founder and CIO Jonathan Litt wrote in a letter to shareholders that was made public on Friday. “Further, in our opinion, three recently completed multi-billion dollar seniors housing transactions highlight both the significant institutional demand for senior housing as well as the high valuations the real estate continues to garner in the private market.”
Litt wrote that “shareholders, ourselves included, would be extremely disappointed and would hold the Brookdale board accountable if the strategic alternatives process is not fully explored and fails to result in a successful conclusion. We, and in our opinion other shareholders will stand with us, refuse to accept any half steps taken by this board instead of the clear transparent action required to maximize shareholder value.'
Earlier this week, Wells Fargo upgraded Brookdale to “outperform” from “market perform” on higher probability that the seniors housing operator would reach a strategic deal, according to a report by Benzinga. “We think a sale of at least some of BKDs owned assets has the highest probability purely because it is the most straightforward of strategic options on the table and would likely face least resistance by its REIT partners,” analyst Ryan Halsted wrote in a note. Halsted raised his valuation range to $18 to $21 from $14 to $16.
Citing unnamed sources said to be familiar with matter, the Wall Street Journal reported on Tuesday that Brookdale was in early discussions with the Blackstone Group and other potential investors. The WSJ story pointed out that talks were preliminary and might not result in a transaction. A Brookdale spokeswoman tells Globest.com the company declines to comment on the WSJ report.
As of Tuesday, Brookdale had a market value of $2.4 billion. However, as of this past September it had an enterprise value of more than $8 billion, including its long-term debt and lease obligations of nearly $6 billion. The company's property alone is estimated to be worth up to $7 billion, according to the WSJ.
NASHVILLE—Following reports earlier this week that
Litt wrote that “shareholders, ourselves included, would be extremely disappointed and would hold the Brookdale board accountable if the strategic alternatives process is not fully explored and fails to result in a successful conclusion. We, and in our opinion other shareholders will stand with us, refuse to accept any half steps taken by this board instead of the clear transparent action required to maximize shareholder value.'
Earlier this week,
Citing unnamed sources said to be familiar with matter, the Wall Street Journal reported on Tuesday that Brookdale was in early discussions with the Blackstone Group and other potential investors. The WSJ story pointed out that talks were preliminary and might not result in a transaction. A Brookdale spokeswoman tells Globest.com the company declines to comment on the WSJ report.
As of Tuesday, Brookdale had a market value of $2.4 billion. However, as of this past September it had an enterprise value of more than $8 billion, including its long-term debt and lease obligations of nearly $6 billion. The company's property alone is estimated to be worth up to $7 billion, according to the WSJ.
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