New Senior Expects Strategic Review Conclusion in Coming Months

New Senior Investment Group Inc. (NYSE: SNR) on Friday announced that its board of directors expects to share the outcome of its previously announced strategic review “in the coming months.” 

The New York City-based real estate investment trust (REIT) first announced the strategic review in February, saying that it was considering an outright sale of the company, among other options. New Senior announced all options were on the table as it aims to boost value for shareholders in the face of near-term challenges, such as new supply and tight labor markets. New Senior currently has a portfolio of 133 senior housing properties in 37 states.

Initially, the company did not put any timeframe around the review, but offered some additional detail on Friday. Specifically, it has formed a special committee of its board, made up of “independent and disinterested directors,” who are being advised by independent financial and legal advisors, the company stated in a press release. Along with the outcome of the strategic review, the committee anticipates announcing a change to New Senior’s dividend policy.

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The REIT declared a cash dividend of 26 cents per share for the quarter ended March 31, which has been the dividend going back to 2015. The ongoing review of strategic alternatives was a key factor in the board’s decision to maintain the first quarter dividend at this level, the company said in a press release.

Typically, New Senior has announced its dividend in conjunction with its first-quarter earnings release, but pushed back that announcement due to the strategic review, CEO Susan Givens stated during the first-quarter earnings call last month. At that time, she said the company would announce its dividend by June 1.

This seemed to imply a coming dividend cut, even though Givens had previously described the dividend as “sustainable,” hedge fund billionaire and New Senior investor Lee Cooperman said on the earnings call.

Givens responded that she had not ever meant to imply a sustainable dividend in the midst of the strategic review process, and said that the company would continue to “update the market” on that issue.

She also indicated that the REIT’s ownership is being evaluated as part of the strategic review. New Senior is managed by an affiliate of global investment firm Fortress Investment Group, which also owns its major tenant, Holiday Retirement.

“We know that the external managed structure has been something that’s been a key focal point for folks, and I think it’s safe to say that it is something being looked at very carefully and it’s being evaluated [in the strategic review] as I think you would expect us to be evaluating it,” Givens said.

As of market close on Friday, the REIT’s share price had risen 2.67% to $7.68.

Written by Mary Kate Nelson

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