Land & Buildings to vote against Healthcare Realty Trust’s proposed acquisition of Healthcare Trust of America
Land & Buildings said Thursday it would vote against Healthcare Realty Trust’s proposed acquisition of Healthcare Realty 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 one of the reasons it opposes the acquisition is that there was a “fault process and valuation” of a $5 billion all-cash offer that Toledo, OH-based real estate investment firm Welltower made after Healthcare Realty Trust announced plans to acquire Healthcare Trust of America.
“We see little strategic rationale for Healthcare Realty’s acquisition of Healthcare Trust of America and find it baffling that HR [Healthcare Realty] rejected Welltower’s cash offer to pursue a value-destroying transaction,” Jonathan Litt, founder and chief investment officer of Land & Buildings, said in a statement.
On March 28, Healthcare Realty Trust announced that it had received an unsolicited, non-binding proposal from a REIT to acquire all of the company’s outstanding common shares for $31.75 per share. Welltower CEO Shankh Mitra later confirmed his company was the bidder, according to Bloomberg.
Land & Buildings also argues that Healthcare Realty Trust’s valuation is likely to be adversely affected by Healthcare Trust of America’s “historic business valuations and substandard assets” and Healthcare Realty’s “history of underperformance”.
Land & Buildings said it believed it had the backing of other shareholders not to support the proposed acquisition.
“Many other HR shareholders we have spoken to plan to vote against the deal, and we believe it will be difficult to meet the 2/3 threshold needed for approval at the July 15 special meeting. “, Litt said. “We encourage the board 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 it remained committed to the transaction.
“The combined company will have unparalleled market scale in concentrated clusters, significant business and operational synergies, a larger development pipeline and a strengthened balance sheet with increased liquidity and better access to capital. The transaction is expected to be accretive through near-term spend synergies, with additional value from operational uplift through large-scale platforms,” the REIT said.