New Capital
Contrarian, Deep Value, long/short equity, special situations

Five Star Quality Care - Special Situation Of Competing Tender Offers - At Least 20% Upside

This is an interesting special situation whereby two strategic investors and current shareholders have announced competing tender offers for 20% of the outstanding shares. Five Star Quality Care (NYSE:FVE) currently trades below the tender prices and thus I see it as a great opportunity to profit from the bidding war. The downside is well protected by the assets on the balance sheet.


On Oct 3, 2016, ABP Acquisition (controlled by the Portnoy family, owner of 8.6% of FVE shares through Senior Housing Properties Trust) commenced a tender offer for 10m shares at $3 per share. This represented 20% of the shares outstanding. Right after the announcement, the price jumped to $2.7, leaving only a minimal

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