Nashville-based Healthcare Realty Trust shareholder Land & Buildings Investment Management is seeking to stop a proposed merger between the real estate investment trust and Healthcare Trust of America.
Announced in February, the deal’s total enterprise value was reported at nearly $18 billion and was expected to close in the third quarter. The total equity market value is estimated at $11.6 billion.
Land & Buildings Investment Management was founded by activist investor Jonathan Litt, and owns more than 1 percent of Healthcare Realty Trust, according to Bloomberg.
Land & Buildings’ presentation expressed concern over Healthcare Trust of America’s lower valuation and its apparent unwillingness to engage with Welltower, an Ohio-based real estate investment trust that reportedly offered a 28-percent premium to Healthcare Realty Trust’s share price.
The presentation also noted concern over conflicts of interest, as much of Healthcare Realty’s management team and board will retain their existing positions. Healthcare Realty Trust saw an 11 percent drop in its share price following the merger announcement, according to a press release from Land & Buildings.
A special shareholders meeting is set for July 15.
“We see little strategic rationale for Healthcare Realty’s acquisition of Healthcare Trust of America and find it puzzling that HR rejected Welltower’s all-cash offer to pursue a value-destructive transaction,” Litt said. “Numerous other HR shareholders that we have spoken to plan to vote against the deal, and we believe it will be difficult to reach the 2/3 threshold necessary for approval at the July 15 Special Meeting. We encourage the Board of Directors to seriously reconsider whether the path it has chosen is the right one for all shareholders.”
Healthcare Realty Trust remains committed to executing the merger, according to a statement from the company. The company said it hadn’t heard from Land & Buildings since the merger was announced.
“The combined company will have unmatched market scale in concentrated clusters, meaningful corporate and operational synergies, a larger development pipeline, and a strengthened balance sheet with enhanced liquidity and improved access to capital,” a release said.