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Brookdale Senior Living turns down takeover offer, replaces management

Brookdale Senior Living Inc. rejected a $9-per-share buyout offer during its recently completed strategic review, which led it to conclude that it could create more shareholder value as a public company under new leadership.

In keeping with this decision, President and CEO T. Andrew Smith will leave his positions Feb. 28 and be replaced by CFO Cindy Baier, who will continue to serve as the company's principal financial officer until her replacement.

Additionally, Executive Chairman Daniel Decker will retire from the board March 1 and be replaced by current director Lee Wielansky as nonexecutive chairman. Board member William Petty Jr. and CEO Smith are also leaving the board.

Executive Vice President and Chief Administrative Officer Bryan Richardson will leave the company March 9. Brookdale does not intend to replace him.

Separately, in announcing its fourth-quarter 2017 earnings, Brookdale provided an update on a series of agreed-to transactions with one of its landlords, HCP Inc. Brookdale terminated 23 triple-net leases with the healthcare real estate investment trust during the quarter and recognized an $11.4 million gain on sale of the properties for deferred gains from sale-leaseback transactions.

Also during the quarter, Brookdale completed the sale of its 10% ownership stake in one of its REIT Investment Diversification and Empowerment Act ventures with HCP for $32.1 million and recognized a $7.2 million gain on the sale.

The company in January closed the acquisition of one community from HCP, and it expects to close the sale of its ownership interest in a second RIDEA venture and the acquisition of five other HCP communities in the next three months. It also expects to terminate triple-net leases on 33 communities and management agreements on 37 communities with HCP throughout 2018.

In announcing the management changes and conclusion of the strategic review, Brookdale said the acquisition offer could have increased to $11 per share under certain conditions, which the seniors-housing operator did not believe were likely to be satisfied.

Brookdale has been the rumored takeover target of numerous suitors, including Ventas Inc., Blackstone Group LP and Zhonghong Zhuoye Group Co. Ltd.