DHC - Diversified Healthcare drops as holder plans to vote in favor of Office Properties deal

2023-06-21 12:50:09 ET

Diversified Healthcare Trust ( NASDAQ: DHC ) fell 14% after a large shareholder said it planned to vote in favor of the planned deal with Office Properties Income Trust ( NASDAQ: OPI ). OPI ticked down 0.5%.

DHC holder ABP Trust disclosed owning 23.3 million shares, or a 9.7% stake, and said it plans to vote in favor of the OPI transaction, according to a 13D filing from ABP Trust and Adam Portnoy on Tuesday. Portnoy is the CEO of RMR Group ( RMR ), which is the external manager of the DHC and OPI.

The filing comes after the REIT has received pushback from some large holders, including D.E. Shaw and Flat Footed LLC , which earlier this month filed a proxy opposing the deal. D.E. Shaw last Monday said it sent a private letter to the board of DHC about its opposition to the deal.

Flat Footed said last month that the proposed merger with Office Properties ( OPI ) "dramatically undervalues DHC." Flat Footed values DHC’s portfolio of assets at about $5 billion and believes the company’s stock should be trading between $9 and $10 a share.

Flat Footed said earlier this month that the deal  price is "dramatically" lower than the all-cash $4 per share bid rejected by this same board as "inadequate" in May of last year.

More on Diversified Health/Office Properties

• Diversified Healthcare: Is It Actually Worth Over $9.00?
• Nightmare Deal Between Office Properties Income Trust And Diversified Healthcare Trust
• RMR Brings Diversified Healthcare And Office Properties Together

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