The Five Star Quality Care (NYSE: FVE) Board of Directors has officially responded to a public call for the sale of Five Star’s owned assets to Gemini Properties, an affiliate of senior living owner and operator Senior Star.
On Dec. 21, Five Star wrote to Senior Star and Gemini Principal William Thomas and reiterated that its owned assets are not for sale.
In the letter, disclosed in a U.S. Securities and Exchange Commission filing, the Five Star board says it believes focusing on improving earnings is the best way to improve the trading value of Five Star’s securities.
The letter reveals that Five Star’s current business plan is to expand the number of owned communities, as opposed to disposing of owned properties.
The board adds that many of the business initiatives Senior Star has recommended are already underway—and they do not necessitate the sale of Five Star’s owned communities.
“The Five Star Board understands that selling Five Star’s owned communities to a competitor company which you own or control may benefit you, but the Board does not believe selling these communities at this time will serve the best interests of Five Star or its shareholders,” the letter concludes.
Senior Star has been pressuring Five Star to sell 33 senior living properties to Tulsa, Oklahoma-based Gemini Properties for $325 million.
The proposed transaction would represent “a very viable, strategic option for successfully repositioning Five Star and unlocking value for all shareholders,” Thomas said in a Dec. 15 letter to Five Star.
Written by Mary Kate Nelson