Brookdale files $1B shelf, majority owner may be out

Senior living company's registration statement also includes notice that hedge fund is looking to shed 60 percent stake

Email | Print By Walker Duncan

Brookdale Senior Living has taken a big step in attempting to raise the funds to pay off its debt, and also may be losing its largest shareholder.

Yesterday, the company filed a shelf registration of up to $1 billion with the Securities and Exchange Commission. The move is not surprising as the company, like so many others, works to find ways to raise capital and pay of debt in tumultuous credit markets.

Until recently, the company had been staring down the barrel of a $200+ million line of credit coming due this month. From the latest 10-Q filed by the company, it appears that that line has been refinanced and pushed back until November 2011. The company has another similar-sized line coming due during the same year.

More interesting in the registration filing is the news that the Brookdale’s largest shareholder, the struggling Fortress Investment Group hedge fund, may be looking to sell the majority stake it has built in the last nine years.

In its offering prospectus, Brookdale says “selling stockholders may also offer and sell, from time to time, up to 60,875,826 shares of our common stock.”

This would account for the vast bulk of Fortress’ 61,007,867 listed in the company’s most recent proxy statement. According to the proxy, that share figure accounts for roughly 58 percent of Brookdale's outstanding shares.

Fortress, which had been one of Wall Street's highest fliers prior to the downturn, has since struggled after the days of levering real estate deals 10-to-1 ended. The investment group’s trials are detailed in this article from The Deal.

Brookdale’s stock (Ticker: BKD) was changing hands for $11.31 at about 10 a.m., down 6.7 percent on the day.