ProMedica, Welltower in bid to acquire Quality Care Properties -sources

ProMedica, Welltower in bid to acquire Quality Care Properties -sources
(Adds background on the companies, share reaction)

By Greg Roumeliotis, Tracy Rucinski and Jessica DiNapoli

April 25 (Reuters) - Nonprofit hospital network operator ProMedica and healthcare-focused real estate investment trust Welltower Inc have made a $2 billion offer to acquire Quality Care Properties Inc, people familiar with the matter said on Wednesday.

The deal would make ProMedica a national U.S. healthcare provider by allowing it to take on the assets of nursing home chain HCR ManorCare Inc. Quality Care Properties won court approval earlier this month to pick up HCR ManorCare from bankruptcy.

ProMedica and Welltower's offer values Quality Care Properties at around $20 per share, close to its current market value, the sources said.

The negotiations between the companies are ongoing, and there is no certainty that a deal will be reached, added the sources, who asked not to be identified because the matter is confidential.

ProMedica, Welltower and Quality Care Properties did not immediately respond to requests for comment.

Quality Care Properties shares were up on the news, rising 5.4 percent to $21.93 on Wednesday afternoon. Welltower shares were down 2 percent at $50.00.

HCR ManorCare, which filed for bankruptcy in March, is one of many chains that struggled to make rent on leases since declining Medicaid and Medicare reimbursements started cutting into margins in 2012.

Quality Care Properties, which is HCR ManorCare's landlord, spans 257 skilled nursing properties, 61 assisted living properties, a surgical hospital and medical office buildings in 29 states. HCR ManorCare has a network of more than 500 skilled nursing and rehabilitation centers, memory care communities, assisted living facilities, outpatient rehabilitation clinics, and hospice and home healthcare agencies.

Quality Care Properties has agreed to give up its status as a publicly traded real estate investment trust to take over HCR ManorCare, and has appointed a management team led by Guy Sansone, managing director at turnaround advisory firm Alvarez & Marsal, to oversee the planned sale of 74 skilled nursing facilities.

ProMedica is a nonprofit health system providing quality healthcare services to 28 counties in northwest Ohio and southern Michigan, with 13 hospitals, six ambulatory surgery centers and more than 300 other facilities.

Welltower, which has a market capitalization of $18.9 billion, invests in properties in the senior housing, post-acute care and outpatient medical sectors. (Reporting by Greg Roumeliotis, Jessica DiNapoli and Carl O'Donnell in New York and Tracy Rucinski in Chicago Editing by Matthew Lewis)

First Published: 2018-04-25 19:12:23
Updated 2018-04-25 20:03:50

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