How transparent are the activist shareholders about what would happen to Brookdale Senior Living if it followed through on their recommendations? Not very.
After spending four years being critical of practically everything Brookdale did since the acquisition of Emeritus, the one thing I did not criticize the company for doing was not selling off its owned real estate.
Brookdale investor Land & Buildings has been all over management to sell some assets or the entire company. Now, with a 3.7% stake in Brookdale, Macquarie Group has sent a letter to shareholders urging the same thing, claiming the stock is trading at 50% of its asset value.
What these “activist” shareholders don’t disclose is what the impact would be on a company selling off its owned real estate. Would it be better off, or worse? Would it help Brookdale grow and become more valuable? Or would it strangle the company with new expensive capital commitments. What would happen if the entire company was sold?
What I want to hear about from these shareholders is what they think the aftermath would be if Brookdale acted on their appeals. First, I don’t think they know. And second, I am not sure they care. Why? Because they are in it for an opportunistic gain and not the long-term. That is their business. Brookdale management is now in it for the long term, and that is their business. While it may be a rocky road, at least they are heading in the right direction.
