As expected, Five Star Quality Care has rejected the offer by an affiliate of Senior Star to purchase the 33 owned senior living communities for $325 million. Basically, the board said the assets are not for sale, and that the company could improve the value of the shares by improving earnings. Unfortunately, just improving earnings does not result in a higher stock value in this market. Just ask management at Capital Senior Living. So if someone will offer more for the owned real estate than what the entire company is worth, based on its current stock price, what would someone pay for the owned real estate and the operating company? That may be a question that Bill and Bob Thomas may try to answer if they really want to pursue the real estate holdings of Five Star. Is the fight over? Most likely no, because they had to realize the Five Star board, not to mention the management team, would not react kindly to the unsolicited offer. But we may have to wait for the New Year to find out what Plan B is. Or maybe not.
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