Brookdale Pressured by Activist Shareholder to Increase Transparency

An activist shareholder is once again pressuring one of the country’s largest home health providers to act—this time, it says, in the interest of heightened transparency.

Specifically, Stamford, Connecticut-based Land & Buildings Investment Management LLC on Monday urged Brookdale Senior Living (NYSE: BKD) to provide more visibility into its ongoing strategic review process, especially “given the duration of the process,” a public letter to Brookdale shareholders states.

Land & Buildings currently owns approximately 2.7% of Brookdale. Brookdale’s market cap is about $1.8 billion.

The Brentwood, Tennessee-based senior housing provider engaged Goldman Sachs in January to begin a strategic review process, Land & Buildings notes in its letter. A “no comment” response from Brookdale regarding the process “is understandable for a time,” the letter reads, but “given the duration of the process… [Land & Buildings] believe[s] investors are now due more transparency from their Board of Directors on the status of the process.”

When reached by Home Health Care News on Monday, Brookdale said it would not offer comment at this time.

Additionally, Brookdale shares continue to be undervalued, according to Land & Buildings.

“Currently, shares of BKD are trading at less than half of the company’s estimated owned real estate value, despite abundant capital sources investing in the senior housing sector,” the letter says.

According to the group, the value of Brookdale’s real estate alone is estimated at about $16 per share, which is “well above the current share price of $9.59.”

This is far from the first scuffle between Land & Buildings and Brookdale. In December 2016, the activist shareholder advised Brookdale to monetize its assets through a sale of its owned real estate, thereby transforming Brookdale to an “asset light” senior housing management company. Land & Buildings claimed shares of Brookdale stock were worth at least $25 at the time, but the share price at the time was just $12.72.

The next month, in January, Land & Buildings CIO Jonathan Litt said in an open letter that he was “encouraged” by rumors that Brookdale was in discussions to be bought by private equity giant Blackstone Group.

A few months later, in July, Brookdale announced that it had reached an agreement with Land & Buildings to appoint Marcus E. Bromley as an independent member of its board of directors.

Brookdale’s share price had risen 0.83% to $9.67 as of mid-morning on Monday.

Written by Mary Kate Nelson

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Mary Kate Nelson
Assistant Editor at Aging Media Network
When not in the newsroom, Mary Kate can reliably be found reading on her back porch, marathoning TV shows she’s already seen or overspending at Trader Joe’s.