Hedge fund D.E. Shaw to oppose Diversified Healthcare Trust merger with OPI

NEW YORK, June 12 (Reuters) - A second large Diversified Healthcare Trust shareholder is opposing the real estate investment trust's merger with Office Properties Income Trust and is pushing the board to pursue better alternatives, according to a regulatory filing.

Hedge fund D.E. Shaw, which owns a 6.1% stake in Diversified Healthcare Trust, said in the filing on Monday that it told the company privately last month that it planned to vote against the deal. It also said its representatives met with board members twice, in May and again last week, to underscore a "willingness to work constructively" to find financing options.

Last month, Flat Footed LLC, which owns 9.4% of Diversified Healthcare Trust, said the deal undervalues the REIT by 90% and that there are better alternatives to an all-share deal.

Shareholders will be allowed to vote at a special meeting, which has not yet been set.

A representative for Diversified Healthcare Trust did not immediately respond to a request for comment and D.E. Shaw declined comment beyond the filing.

Office Properties Income Trust (OPI) and Diversified Healthcare Trust announced the merger in April, saying it will create a more resilient company that will be better positioned for growth.

DHC shareholders will receive 0.147 share of OPI common stock for each DHC share, which represented an implied value of $1.70 per common share on the day the deal was announced.

Flat Footed, in May, urged the board to consider various strategic alternatives, including a sale of some assets.

DHC's stock price climbed 5.6% on Monday to trade at $2.81 at 1652 GMT. (Reporting by Svea Herbst-Bayliss; Editing by Conor Humphries)