Welltower Inc.’s (NYSE: WELL) proposed $1.95 billion acquisition of Quality Care Properties (NYSE: QCP) may have hit a bump in the road.
QCP on Tuesday announced that it has received an acquisition proposal from a third party, and that the real estate investment trust’s (REIT’s) board of directors believes the proposal could reasonably be expected to lead to a “superior offer” as defined in QCP’s merger agreement with Toledo, Ohio-based Welltower.
Still, QCP’s board has not yet decided that the acquisition proposal comprises a superior offer, and the board continues to recommend that QCP’s stockholders vote to approve the REIT’s merger with the health care REIT.
A superior offer, according to an April 26 Welltower filing with the U.S. Securities and Exchange Commission (SEC), means any deal independently determined to have a greater benefit for QCP’s shareholders.
The 45-day “go-shop” period set forth in QCP’s merger agreement with Welltower expired on June 9.
During the “go-shop” period, representatives of QCP’s financial advisor, Goldman Sachs & Co. LLC, reached out to 34 parties on behalf of the REIT, including health care providers, REITs, operators and other strategic parties, financial sponsors and non-profit health organizations.
Ever since June 9, QCP has been subject to customary “no shop” provisions, other than with respect to the potential bidder. In fact, QCP is allowed to continue to furnish non-public information to, solicit proposals from, and engage in further negotiations and discussions with, the potential bidder.
Under the planned merger agreement as it currently stands, Welltower, in a joint venture with nonprofit health system ProMedica, would own the real estate of major post-acute provider and former QCP tenant HCR ManorCare. ProMedica is planning to acquire the operations of HCR ManorCare for approximately $1.35 billion in cash, in addition to the assumption of net liabilities.
ProMedica continues to believe that the prior acquisition agreement would benefit QCP’s shareholders the most..
“We are aware that Quality Care Properties, Inc. has received another offer,” Tausha Moore, ProMedica’s public relations manager, told Senior Housing News. “We think the Welltower/ProMedica joint offer is competitive and would provide the greatest value to QCP’s shareholders.”
Welltower did not have anything to add about the situation beyond what was said in Quality Care Properties’ Tuesday press release, Mary Ellen Pisanelli, Welltower’s senior vice president of legal, told SHN.
The deal “reinvents and revitalizes post-acute and long-term care delivery as part of an integrated health system,” Welltower has claimed.
Written by Mary Kate Nelson