Following months of buyout speculation, Brookdale Senior Living (NYSE: BKD) is now in acquisition talks with a Chinese firm that has offered $3 billion to purchase the largest U.S. senior living provider, according to a Tuesday report by Reuters.
Financial Times then followed up with a Wednesday report that Brookdale could fetch more than $4 billion in a sale that could be agreed upon “in the coming days.” The publication cited unnamed sources.
China-based real estate and leisure group Zhonghong Zhuoye Group Co Ltd, which purchased a stake in SeaWorld Entertainment Inc. last month, is in talks to acquire the senior housing giant for approximately $3 billion, Reuters reported on Tuesday, citing people familiar with the situation.
Specifically, Brookdale entered into exclusive negotiations with Zhonghong after it fielded offers from other parties that valued the company at “substantially below” $3 billion, Reuters’ sources said.
No deal is certain and negotiations remain ongoing, the people told Reuters.
Additionally, Brookdale must be persuaded that the Committee on Foreign Investment in the United States (CFIUS)—which examines corporate acquisitions for possible national security risks—would approve a deal with Zhonghong, Reuters reported. This is particularly relevant given the nature of Brookdale’s health care services provided to senior residents.
Brookdale Senior Living told Senior Housing News it “cannot comment on market rumors or speculation.”
Analysts have reasoned it makes sense for a Chinese firm to purchase Brookdale, given the large amount of foreign capital that has been chasing U.S. real estate in recent years, and particularly China-based buyers that have been targeting senior housing in recent months, Jeffries analyst Brian Tanquilut told Senior Housing News in May.
In March, the investment banking firm predicted the probability that Brookdale would be sold between then and the end of 2017 is greater than 50%.
Written by Mary Kate Nelson