Land & Buildings Accuses Brookdale of Doing ‘Bare Minimum to Appease Shareholders’

Activist shareholder Land & Buildings has once again blasted Brookdale Senior Living (NYSE: BKD), saying in a public letter that the company is doing “the bare minimum to appease shareholders.”

Land & Buildings is incensed that Brentwood, Tennessee-based Brookdale — the nation’s largest senior living provider — has not taken steps to monetize more of its owned real estate. In addition, Land & Buildings is sharply critical of Brookdale’s corporate governance, arguing that shareholders are being deprived of a proper say on the composition of the board and that the goal of the company is “entrenchment.”

These are not new complaints from the shareholder.

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Brookdale’s share price began to slide during a troubled integration with Emeritus Corp., after a mega-merger of the two senior housing giants was finalized in 2014. In the midst of this slide, Land & Buildings started pressing Brookdale to unlock shareholder value by selling or spinning off its owned real estate. Land & Buildings has valued the real estate at more than $21 per share.

Last year, as reports surfaced that Brookdale was negotiating a full or partial sale of the company, Land & Buildings publicly pushed for such a transaction. A deal did not come to pass, however. Early this year, Brookdale named Cindy Baier its new CEO and committed to an operational turnaround.

Land & Buildings has been complimentary of Baier’s leadership approach — including in a letter released last month — but is now taking issue with how she was appointed to the board. Baier was appointed in February as a class of directors not up for election until 2020. This is “depriving shareholders of a say on her candidacy to serve until two years after her appointment,” Land & Buildings stated in its letter released Wednesday.

More generally, Land & Buildings is concerned that Brookdale did not agree to have directors elected to one-year terms in 2018, that the company did not allow shareholders to call a special meeting, and that the board did not release potential acquirers of the company from standstill agreements signed during the strategic review process. 

Unless Brookdale changes its corporate governance policies and announces an “aggressive real estate monetization plan,” Land & Buildings intends to vote against three directors up for election at the annual meeting scheduled for Oct. 4., 2018.

Written by Tim Mullaney

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