Senior Housing Properties plunges on Five Star deal, dividend cut

|About: Senior Housing Properties T... (SNH)|By:, SA News Editor

Senior Housing Properties (NASDAQ:SNHdrops 21% after its restructured arrangement with Five Star Senior Living (NASDAQ:FVE) leads to Senior Housing cutting its annual dividend to an expected 55 cents-65 cents per share.

SNH also expects to sell properties valued at up to $900M to achieve a debt-to-adjusted EBITDA ratio of about 6.0x by the end of 2019.

As part of the deal, SNH will increase its ownership in Five Star to ~34% from its current 8.3% stake; SNH holders will get a right to receive FVE shares, resulting in SNH holders owning ~51% of Five Star.

SNH says shareholders' Five Star holdings may help compensate for the lower dividend rate.

Previously: Five Star Senior Living restructures arrangements with Senior Housing (April 2)

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This was corrected on 04/02/2019 at 04:08 PM. In first bullet correct to show expected dividend reflects a range; and in third bullet deletes the number of FVE shares per SNH share to be issued--the number isn't yet disclosed.