Land & Buildings said Thursday that it will vote against Healthcare Realty Trust’s proposed acquisition of Healthcare Trust of America at a July 15 special meeting, and it urged other shareholders to follow suit.
In a presentation released yesterday, Land & Buildings said that one reason it opposes the acquisition is that there was a “flawed process and evaluation” of a $5 billion all-cash bid that Toledo, OH-based real estate investment trust Welltower made after Healthcare Realty Trust announced its intention to acquire Healthcare Trust of America.
“We see little strategic rationale for Healthcare Realty’s acquisition of Healthcare Trust of America and find it puzzling that HR [Healthcare Realty] rejected Welltower’s all-cash offer to pursue a value-destructive transaction,” Jonathan Litt, founder and chief investment officer of Land & Buildings, said in an announcement.
March 28, Healthcare Realty Trust announced that it had received an unsolicited, non-binding proposal from a REIT to acquire all the company’s outstanding common stock for $31.75 per share. Welltower CEO Shankh Mitra later confirmed that his company was the bidder, according to Bloomberg.
Land & Buildings also maintains that Healthcare Realty Trust’s valuation likely will be negatively affected by Healthcare Trust of America’s “historical trading valuations and lower quality assets” and Healthcare Realty’s “history of underperformance.”
Land & Buildings said it believes that it has support from other shareholders in not supporting the proposed acquisition.
“Numerous other HR shareholders that we have spoken to plan to vote against the deal, and we believe it will be difficult to reach the 2/3 threshold necessary for approval at the July 15 Special Meeting,” Litt said. “We encourage the Board of Directors to seriously reconsider whether the path it has chosen is the right one for all shareholders.”
In a statement Wednesday, Nashville, TN-based Healthcare Realty Trust said that it remains committed to the transaction.
“The combined company will have unmatched market scale in concentrated clusters, meaningful corporate and operational synergies, a larger development pipeline, and a strengthened balance sheet with enhanced liquidity and improved access to capital. The transaction is expected to be accretive through near-term expense synergies, with additional value from operational upside through scaled platforms,” the REIT said.
