Senior Housing Properties plunges on Five Star deal, dividend cut

Apr. 02, 2019 9:33 AM ETDHC, ALRBy: Liz Kiesche, SA News Editor19 Comments

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)

This was corrected on 01/27/2022 at 9:26 AM. 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.