Final week, Brookdale Senior Residing (NYSE: BKD) shareholders rejected six board of director candidates nominated by Ortelius Advisors throughout the operator’s annual assembly – however the activist investor believes the battle nonetheless led to some optimistic modifications ultimately.
On July 11, Brookdale gained in its months-long proxy struggle with Ortelius, preserving its board of administrators intact after the 2 corporations traded barbs and outlined dueling visions for the operator.
Ortelius had beforehand referred to as for modifications to Brookdale that will have included asset gross sales and unwinding leases of underperforming communities. By unseating sure longtime board members, the corporate sought to alter Brookdale’s trajectory as an organization to unlock extra actual property worth for shareholders.
However whereas the corporate’s modifications in the end didn’t come to move, Ortelius Managing Member Peter DeSorcy on Wednesday mentioned the agency’s efforts “served as an essential catalyst for change” inside the Brentwood, Tennessee-based senior dwelling supplier. Particularly, DeSorcy believes his agency performed a task within the current departure of former Brookdale CEO Cindy Baier, and that its public proxy struggle helped rally different shareholders below the banner of change on the nation’s largest operator.
“Ortelius stays skeptical that the present board has the appropriate technique, willingness, and talent to do what is important to maximise stockholder worth, and is satisfied that there’s vital untapped worth inside Brookdale,” DeSorcy mentioned. “For the corporate, and the board, this stays a essential second.”
DeSorcy added Brookdale wanted to seek out the “proper CEO” and be “employed rapidly” whereas the board should “execute on current guarantees.”
This comes as DeSorcy mentioned Brookdale “continues to be considerably undervalued” and {that a} “long-overdue turnaround is crucial.”
“As a stockholder, Ortelius stays deeply invested within the Firm’s future, and can carefully monitor developments, ” DeSorcy mentioned. “Furthermore, we won’t hesitate to take additional motion to make sure that each the Board and administration are held absolutely accountable for maximizing stockholder worth.”
Brookdale not too long ago famous that getting again to 84.5% occupancy, final reported in 2020, would end in substantial money circulate enhancements as much as $380 million in incremental income. The corporate not too long ago surpassed 80% occupancy. Internet working earnings (NOI) within the first quarter was 28.6%, a 130-basis level improve in comparison with the identical interval final 12 months.
The corporate additionally overcame a 2019 proxy struggle with Land & Buildings to put in a brand new board, however the effort stalled.
