After some dissidents tried to torpedo the deal, shareholders decided bigger was better.
Well, the vote is in, and it looks like the merger of Sabra Health Care REIT and Care Capital Properties will go through as planned. It wasn’t easy, and Sabra’s CEO Rick Matros had to deal with two dissident shareholders who controlled only about 8% of the shares between them. They came into the stock late in the game and had no intention of staying around for long. But they caused enough of a ruckus to have shareholder advisory service firm, Institutional Shareholder Services, recommend a no vote against the merger. Let’s just say, we suspect ISS knows little about the skilled nursing business, and perhaps even less about Sabra and CCP. While it may not be the best of times to increase one’s exposure to the skilled nursing business, the merger will make these two smallish REITs, both with heavy concentrations in the skilled nursing sector, financially stronger, with a lower cost of capital, a more diverse customer base, and with their major customers becoming less major as a percentage of the combined portfolio. Let the transition begin.
