The planned $7.4 billion merger of Sabra Health Care REIT, Inc. (Nasdaq: SBRA) and Care Capital Properties, Inc. (NYSE: CCP) has hit a few bumps in the road—none of which particularly worry CCP, however.
Specifically, a proposed class action lawsuit has been brought against Chicago-based CCP in Delaware, alleging that the skilled nursing and health care real estate investment trust (REIT), along with its board of directors, have violated the Securities Exchange Act of 1934.
A few additional lawsuits have been filed against CCP as well, similarly alleging that the company has violated the Securities Exchange Act of 1934.
The plaintiff in the aforementioned proposed class action lawsuit—Glenn Parrish—is bringing the lawsuit on behalf of himself and the public stockholders of CCP. The intent of the lawsuit is to prevent a stockholder vote on CCP’s proposed merger with the Irvine, California-based senior housing property owner until additional material is disclosed.
Specifically, the lawsuit urges CCP to disclose more information in its Registration Statement on Form S-4 with the U.S. Securities and Exchange Commission (SEC). The original registration statement, the lawsuit says, misrepresents or omits material information that shareholders need “in order to cast a fully-informed vote in connection with the Proposed Transaction.”
Plus, failure to disclose certain information—the conflicts of interest of CCP’s financial advisors, the valuation analyses prepared by Bank of America Merrill Lynch and Barclays in connection with the rendering of their fairness opinions, and more—violates the law, according to Parrish.
A separate lawsuit, brought in Delaware by plaintiff Melvyn Klein, alleges that CCP’s registration statement contains “false and misleading statements” and, for that reason, the proposed merger with Sabra should be enjoined “preliminarily and permanently.”
CCP, for its part, isn’t phased by the lawsuits.
“These lawsuits are commonplace in merger transactions and it is our policy not to comment on ongoing litigation,” CCP Executive Vice President and CFO Lori Wittman told Senior Housing News.
Upon completion of the proposed merger, the new company would have about 564 investments—including senior housing, skilled nursing, transitional care facilities and behavioral health hospitals—across 43 U.S. states and Canada.
The merger was expected to close in the third quarter of 2017.
Written by Mary Kate Nelson