The American Healthcare REIT Board of Directors will remain neutral on an unsolicited mini-tender offer from CMG Partners, the company said Wednesday in a filing with the Securities and Exchange Commission.
The Irvine, CA-based real estate investment trust was formed in November 2022 after the merger of Griffin-American Healthcare REIT III Inc. and Griffin-American Healthcare REIT IV. Among its holdings, the REIT owns 74% of Trilogy Health Services, and AHR executives said in February that the firm is considering buying the remaining 26%.
AHR CEO, President and Director Danny Prosky told stockholders Wednesday that CMG’s offer to purchase an aggregate of 225,000 shares of AHR’s Class T and Class I common stock for $9.07 per share was “substantially below” the closing price of $13.79 per share of AHR’s common stock at the closing of the New York Stock Exchange on Tuesday.
“While the board believes that the CMG offer represents an opportunistic attempt by CMG to purchase the shares and make a profit,” Prosky said, the board made no recommendation on the offer, realizing that stockholders may need near-term liquidity.
“It is the general position of the board to not make a recommendation with respect to tender offers and for each stockholder to evaluate such offers factoring their unique circumstances,” he added.
The CEO encouraged stockholders to meet with their financial advisers before making a decision, noting that if they choose to sell their shares to CMG, they will not be entitled to receive any future distributions from AHR if the sale is completed.
Currently, those distributions are paid at an annualized rate of $1 per share.
“While there are no guarantees of future distributions and there can be no certainty regarding the long-term value of AHR’s common stock because the value is dependent on a number of factors, stockholders who tender their shares pursuant to the CMG offer would give up their rights to any future distributions after the conclusion of the CMG offer,” Prosky added.
This is not the first time AHR has met with unsolicited mini-tender offers similar to this one. Comrit, for example, has made offers several times over the past few years. Most recently, in January, the REIT’s board also chose to remain neutral on a Comrit solicitation.
In March, American Healthcare REIT received another offer from Comrit to purchase stock for $5.23 per share. That amount was approximately 62.1% lower than the AHR’s pricing on the NYSE at the time. The board again remained neutral on the offer.
