Quality Care Properties shareholders overwhelmingly approve Welltower merger

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Mark Ordan
Mark Ordan

Quality Care Properties stockholders overwhelmingly voted in favor of being acquired by fellow real estate investment trust Welltower on Wednesday at a special meeting in Bethesda, MD, where QCP is headquartered.

Voting for the merger, which technically is with Welltower subsidiary Potomac Acquisition LLC, were 76,429,143 shareholders, voting against it were 2,895,332, and abstaining were 885,264, according to QCP's Wednesday afternoon filing with the Securities and Exchange Commission.

“We thank our stockholders for their support and look forward to completing the merger,” QCP CEO Mark Ordan said in a statement.

Under the terms of the deal, first announced in April, shareholders will receive $20.75 per share as Welltower acquires the assets of QCP for approximately $1.95 billion. In a separate deal, nonprofit health system ProMedica will acquire QCP tenant HCR ManorCare for approximately $300 million in cash and the assumption of $1.1 billion in debt. ManorCare will become a wholly owned indirect subsidiary of QCP.

A new 80/20 joint venture between Welltower and ProMedica will lease ManorCare's real estate to ProMedica for 15 years. ProMerica also will acquire ManorCare's operations. The ManorCare properties will continue to be managed by the team in place at the company.

The QCP deal with Welltower survived potential competition from another entity and two shareholder lawsuits, which later were resolved.

Welltower CEO Tom DeRosa previously described the deal as “an exciting opportunity for Welltower” and said it “singularly validates our strategy of partnering with major health systems to drive healthcare delivery to lower-cost settings while improving health outcomes.”

QCP shareholders also approved, on a nonbinding basis, “golden parachute” compensation of approximately $27.4 million for Ordan, $15.9 million for President and Chief Investment Officer D. Gregory Neeb and $9.2 million for Chief Financial Officer C. Marc Richards. The potential payments include severance, a prorated bonus and stock options.

The vote on this proposal was closer. There were 42,292,088 votes for the payments, 36,938,398 votes against them, and 979,253 abstentions, according to QCP.

Welltower, ProMedica and ManorCare are headquartered in Toledo, OH.

QCP operates in 28 states, with a total of 61 memory care/assisted living properties, 243 post-acute/skilled nursing properties, a surgical hospital and a medical office building.

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