Senior Housing Properties (NASDAQ:SNH) drops 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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