CNL Healthcare Properties REIT Urges Stockholders to Reject Third-Party Tender Offer
The board of directors of CNL Healthcare Properties, Inc., a non-traded real estate investment trust focused on senior housing, recommended that stockholders reject an unsolicited, non-binding tender offer from West 4 Capital LP, a Cayman Islands exempted limited partnership and unaffiliated third party.
West 4 Capital has offered to buy up to 8.8 million, or approximately 5%, of the issued and outstanding shares of common stock at a price of $3.29 per share, without interest.
CNL’s board stated that it believes that the West 4 offer is seeking to capitalize on CNL’s lack of liquidity and make a profit by purchasing shares at a price significantly below their fair value. According to CNL, West 4’s price of $3.29 is 47.6% less than CNL’s $6.28 estimated NAV per share as of December 31, 2023. As previously reported by The DI Wire, this was a 9.25% decline from the previous year.
CNL said that it is currently undertaking another valuation process with plans to announce an updated estimated NAV per share as of December 31, 2024 on March 10, 2025.
CNL also reported that West 4’s offer expressly reserves the right to amend the terms of the tender offer, including decreasing the $3.29 offer price, among other terms.
The company also reminded shareholders that its board of directors has been actively exploring strategic alternatives since 2018, including a possible sale of the company. CNL also stated that it believes that its current portfolio of 70 properties, including 69 senior housing communities and one vacant land parcel adjacent to one of its senior housing communities, is well-positioned to generate long-term value for the company’s stockholders.
From 2019 to 2022, CNL paid a regular quarterly cash distribution of $0.0512 per share. In 2022, the distribution was adjusted to $0.0256, which has continued to be paid through the fourth quarter of 2024.
CNL received a similar tender offer from Comrit Investments 1 LP, a Tel Aviv-based investment fund, around this time last year, while West 4 recently made a similar tender offer to the stockholders of InPoint Commercial REIT.
CNL Healthcare Properties is a non-traded REIT that seeks to provide income and growth. Drawing upon its management team’s prior senior housing experience, extensive healthcare operating knowledge and strong relationships with leading operators, the company has acquired and developed a portfolio of senior housing and healthcare properties.
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