Sunrise investors accept Ventas bid
The heated battle for Sunrise Senior Living Real Estate Investment Trust neared an end yesterday, with 78.1 per cent of unitholders endorsing a $1.1-billion takeover offer from Ventas Inc.
"Unitholders understood that this is a really good price for the company," chief executive officer Douglas MacLatchy said following the vote. Mr. MacLatchy said he has spent the last week meeting with investors in New York, Boston, Philadelphia, Montreal and Toronto to make the case for the Ventas deal.
After those talks, he said the REIT was confident it had the two-thirds support required to carry the deal. "We wouldn't have had the meeting if we did not know the outcome," he said.
Ventas, a seniors housing company based in Louisville, Ky., raised its bid for Sunrise to $16.50 a unit from $15 last week in the face of mounting investor pressure and just hours before shareholders were scheduled to vote on the sale of the REIT.
"We are extremely pleased with the outcome of today's vote," Ventas CEO Debra Cafaro said in a release. "We intend to complete this transaction as quickly as possible and we anticipate a smooth transition."
Ventas had characterized the sweetened offer as its "best and final." It came after weeks of legal wrangling that culminated with Ventas launching a lawsuit against Sunrise, alleging that it had breached the terms of their takeover contract. Ventas has also successfully used the courts to have a rival, $18-a-unit bid by Health Care Property Investors Inc. disqualified. Under the terms of the new deal, Ventas will drop its suit against Sunrise REIT now that the deal is accepted.
At yesterday's meeting Mr. MacLatchy said many of the investors he spoke with in the past week were concerned about the disappearance of another listed property company, given the huge wave of M&A activity that has swept the sector in the past 18 months.
"So many companies have gone private, they were fighting hard not to have another one go away," he said.
Steven Buller, portfolio manager for Fidelity's Global Real Estate Funds, said while privatizations have shrunk investment options in North America, there have been 24 new property companies listed in Europe and Asia in the past year.
"These things ebb and flow," said the Boston-based manager, who visited Toronto yesterday. "I would not surprise me to see further privatizations, but it's not at a critical point yet."
Sunrise is based in Toronto, but the bulk of its portfolio is in the United States. The REIT owns 77 senior living communities and 11 are in Canada. All of its portfolio is managed by Sunrise Senior Living Inc., a U.S. public company.
