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Brookdale Senior Living Inc. Message Board

  • en_auto_zomen en_auto_zomen Dec 27, 2012 2:25 PM Flag

    Why are people buying BKD?

    Is it because they think there will be a buyout or something??

    Sentiment: Strong Sell

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    • Brookdale Senior Living (NYSE:BKD) is considering options for structuring the company going forward, including the possibility of being bought out by a real estate investment trust, executives said during the Stephens Fall Investment Conference held last week in New York.

      As the largest national senior living provider, Brookdale operates about 67,000 units and owns 22,000 of them. Although analysts have valued the company’s shares in the $28 to $33 range, it trades at about $23 to $24 a share, leading the board to look for ways to optimize value and mitigate the impact of cuts to Medicare reimbursements.

      “There are different ways to get at that value, and they generally involve some kind of a REIT structure,” said Mark Ohlendorf, co-president and CFO of Brookdale, during a presentation. “The REITs have achieved very high valuations in today’s world, because everyone’s trying to get yield in some way, and REITs are yield.”

      There are a number of different options Brookdale is exploring, said Ohlendorf. “We could monetize value in some way with an existing REIT. We have three very large successful REITs in our world,” he continued, referencing HCP (NYSE:HCP), Ventas (NYSE:VTR), and Health Care REIT (NYSE:HCN).

      “They could buy our assets, our company, [and] there could be different tax consequences for different structures,” he said.

      Sentiment: Buy

    • They are uninformed. Margins are deteriorating, after-tax profits non-existent. Significant economic headwinds. Bad bet.

15.62-0.31(-1.95%)Oct 21 4:02 PMEDT