Activist shareholders who have been putting Five Star Senior Living (Nasdaq: FVE) under pressure for a year will not see their nominee take a seat on the senior living provider’s board.
David R. Ford, former Vice Chairman of the Board of Managers for Aegis Living, has withdrawn as a nominee to be on Five Star’s board, according to a Dec. 16 Securities and Exchange Commission (SEC) filing.
Ford was the nominee of William Thomas and Robert Thomas. The brothers together own about 6.8% of outstanding FVE shares. They also co-founded Senior Star, an Oklahoma-based senior housing owner and operator.
Almost exactly one year ago, SEC filings revealed that the brothers were pushing Five Star to sell its 33 owned properties to Gemini Properties, an affiliate of Senior Star, for $325 million. They believed that the move would unlock value for shareholders and put Five Star, the nation’s fourth-largest senior living provider, in a better strategic position for the future.
Their offer was rejected. Five Star Managing Director Barry M. Portnoy said the Thomas brothers were seeking to get the properties at a “bargain basement price.”
More recently, the Thomases criticized a tender offer for 18 million FVE shares made by a Portnoy-owned entity, and took steps to make a counter offer. The Thomases’ tender offer was not made, while the one made by the Portnoy entity was oversubscribed—appearing to consolidate the Portnoy family’s control of the company.
Among other criticisms of how Five Star is being run, the Thomas Brothers have blasted the company’s governance structure. Five Star, its major landlord Senior Housing Properties Trust (NYSE: SNH), and other interrelated companies all are tied up with the Portnoy family and lack independent directors, they said.
Ford would be the type of independent director needed, the Thomas brothers stated, as he has no ties to the Portnoys and possesses significant senior housing experience, given his role with Aegis.
The SEC filing did not indicate why Ford withdrew as a nominee. William and Robert Thomas had not responded to an email from Senior Housing News as of press time.
Written by Tim Mullaney