Quality Care Receives Competing Offer For Welltower’s $2B Bid

BETHESDA, MD–Quality Care Properties has received an acquisition proposal to counter health care REIT Welltower’s $1.95 billion offer made earlier this year. Quality Care’s Board has determined that this offer could “reasonably be expected to lead to a ‘superior offer’ as defined in the merger agreement,” the company said in a statement. The “go-shop” period in the Welltower merger agreement expired on June 9, 2018.

In April Welltower entered into a definite agreement to acquire Quality Care Properties in an all-cash transaction for $20.75 per share, or approximately $1.95 billion. As part of the deal Quality Care also negotiated a separate agreement with ProMedica Health System in which ProMedica would acquire Quality Care’s troubled skilled nursing tenant HCR ManorCare when it completes its Chapter 11 bankruptcy as well as Quality Care’s other major tenant, Arden Courts, the nation’s second largest provider of post-acute services and long-term care.

The total deal value comes to $3.117 billion.

The deal also included a “go shop” clause during which Quality Care reached out to 34 potential parties, including other REITs, health care providers, operators and strategic parties, financial sponsors and non-profit health organizations, to see if they had an interest in making a proposal to acquire it.

QCP provided confidential information to five of the parties contacted and received one acquisition proposal.

Because the board has determined that the new acquisition proposal could reasonably be expected to lead to a superior offer the potential bidder is an “excluded party,” as defined in the merger agreement, and QCP can continue to work with it on a potential deal.

To be clear, the Board has not yet determined that the acquisition proposal constitutes a superior offer under the merger agreement and it has not changed its recommendation that QCP’s stockholders vote to approve the merger with Welltower.