DHC - Diversified Healthcare holder files proxy opposing deal with Office Properties

2023-06-08 10:56:05 ET

Diversified Healthcare Trust ( NASDAQ: DHC ) holder Flat Footed LLC formally filed a proxy in connection with its opposition to the healthcare REIT's deal with Office Properties Income Trust ( NASDAQ: OPI ).

Investor Flat Footed LLC, which has a 9.4% stake in Diversified Healthcare ( DHC ), intends to vote its DHC shares against the proposed merger with OPI, as well as the adjournment proposal, according to a statement.

The formal proxy filing comes after 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.

The proposed merger’s contemplated $1.13 per share takeover price represents nearly an 89% discount to DHC’s intrinsic value, Flat Footed said. It is also "dramatically" lower than the all-cash $4 per share bid rejected by this same board as "inadequate" in May of last year.

Office Properties ( OPI ) agreed to acquire all of the outstanding common shares of DHC in an all-share transaction in April.

More on Diversified Health/Office Properties

• Nightmare Deal Between Office Properties Income Trust And Diversified Healthcare Trust
• RMR Brings Diversified Healthcare And Office Properties Together

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