NEW YORK--(BUSINESS WIRE)--Hudson Bay Capital Management LP, a New York-based investment manager, and its affiliated investment funds (collectively “Hudson Bay”), which beneficially own approximately 3.9% of the common stock of Sabra Health Care REIT, Inc. (NASDAQ:SBRA) (“Sabra” or the “Company”), today issued the following statement in response to leading independent proxy advisory firm Institutional Shareholder Services Inc.’s (“ISS”) recommendation that Sabra shareholders vote against Sabra’s proposed acquisition of Care Capital Properties, Inc. (NYSE:CCP) (“CCP”). A special meeting to vote on the proposed merger is scheduled to be held August 15, 2017.
“We are pleased that ISS agrees that Sabra’s proposed acquisition of CCP is not in the best interests of Sabra or its shareholders and should be voted against at the upcoming special meeting on August 15. Like Hudson Bay, ISS recognizes that the drastic decline in Sabra’s share price since May 7 clearly illustrates that the transaction has not been accepted by the market. We urge Sabra shareholders to follow ISS’s independent recommendation and to vote against this acquisition to ensure that we, as collective holders of Sabra shares, receive the value we deserve for our investment.”
In its August 2, 2017 report ISS noted*:
- “...[T]he fragility of CCP's portfolio along with the headwinds faced by the SNF industry, coupled with the high price that would be paid for the assets, call into question whether the potential benefits of the transaction would be achievable or sustainable. These concerns support the dissidents' argument that the transaction would be value destructive for SBRA shareholders. This negative perception also appears to be shared by the market, as SBRA shares declined significantly at announcement and have remained depressed relative to peers. In light of these factors, support for this proposal is not warranted.”
- “The market reacted negatively to announcement of the merger, as SBRA share price closed at $25.31 on May 8, 2017, 5.1 percent below the prior trading day's unaffected closing price...SBRA share price has continued to decline since announcement, closing at $23.25 on July 28, 2017, 12.9 percent below the unaffected price. CCP share price, which is linked to SBRA share price due to the fixed exchange ratio, closed at $24.23 on the same date, 9.6 percent below the unaffected price.”
- “...[I]t appears that SBRA is overpaying for CCP, as management's growth expectations, when adjusted for rent cuts, are not expected to offset the high cap rate that would be paid in the transaction in the foreseeable future.”
- “...[T]here are concerns about the fragility of CCP's portfolio that call into question whether the risks associated with the transaction are justified by what appears to be an uncertain outcome. Even with the proposed rent reductions, further EBITDAR deterioration could remove the incentive for CCP's tenants to invest in quality of service, which in turn could translate into further EBITDAR deterioration.”
*Hudson Bay has neither sought nor obtained consent from ISS to use previously published information in this press release.
We urge stockholders to vote “AGAINST” the CCP Acquisition at the Special Meeting on the Company’s proxy card. This is not a solicitation of authority to vote your proxy. Please do not send us your proxy card; we are not able to vote your proxies nor does this communication contemplate such an event.
About Hudson Bay Capital
Hudson Bay Capital Management LP is a manager of alternative investment opportunities in the global markets employing a diverse set of catalyst-driven absolute return strategies. We invest across the corporate capital structure and often trade around or in conjunction with an event or catalyst in an effort to exploit market inefficiencies.
Warning Regarding Forward Looking Statements
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS. FORWARD LOOKING STATEMENTS CAN BE IDENTIFIED BY USE OF WORDS SUCH AS "OUTLOOK", "BELIEVE", "INTEND", "EXPECT", "POTENTIAL", "WILL", "MAY", "SHOULD", "ESTIMATE", "ANTICIPATE", AND DERIVATIVES OR NEGATIVES OF SUCH WORDS OR SIMILAR WORDS. FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE ARE BASED UPON PRESENT BELIEFS OR EXPECTATIONS. HOWEVER, FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR AS A RESULT OF VARIOUS RISKS, REASONS AND UNCERTAINTIES. EXCEPT AS REQUIRED BY LAW, HUDSON BAY CAPITAL MANAGEMENT LP AND ITS AFFILIATES AND RELATED PERSONS UNDERTAKE NO OBLIGATION TO UPDATE ANY FORWARD LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.