Ortelius Advisors is making a final push for Brookdale (NYSE: BKD) stockholders to vote for the six nominees Ortelius is supporting in the proxy fight for the company’s board of directors.
In a July 7 letter to stockholders, Ortelius Managing Member Peter DeSorcy highlighted the actions that the firm argues have “spearheaded the vast destruction of stockholder value,” noting Brookdale’s stock price had dropped 37% over the past seven years.
The letter from Ortelius on Monday comes after other recent salvos in the proxy fight. On July 1, Brookdale cited that proxy advisory firm Glass Lewis & Co. joined firm Institutional Shareholder Services (ISS) in advising shareholders to not give control of the board of directors to all of the proposed Ortelius slate, noting concerns with Ortelius’ plans to remake the company to unlock value.
In a July 3 letter to shareholders, Ortelius’ board nominees laid out their top three initiatives for a “turnaround plan” for the company, which include “restoring board accountability and recruiting the next CEO, rationalizing the portfolio and optimizing the platform and rightsizing the balance sheet.”
Brookdale has repeatedly pushed back against Ortelius’ claims and plans, citing and Glass & Lewis Co. that the activist shareholder has had “a poor record of engagement” with the current Brookdale board and that it is lacking necessary details in its plans for the company. Additionally, Brookdale states electing any of the six Ortelius nominees would “risk compromising the continued successful execution of the company’s strategy and impairing its CEO search, ultimately diminishing returns for shareholders.”
To accomplish the goals it has set forward, Ortelius states the current board of directors is “lacking critical senior housing and real estate experience.” As such, ISS has recommended shareholders vote for nominees Steven Vick and Lori Wittman. The July 3 letter also states that Ortelius seeks to “unlock the company’s value” by immediately evaluating all of the company’s owned properties and selling underperforming ones before the end of the year, encouraging managers to “maximize performance” and eliminate the company’s leased portfolio over time.
In monetizing underperforming assets, Ortelius states the plan would reduce mortgage debt as well.
“Ortelius remains deeply concerned about the board’s ongoing missteps, shortcomings, strategic failures, poor judgement, execution, decision-making abilities and defensive maneuvers,” DeSorcy wrote. “Following years of dismal performance, chronic undervaluation, stock price declines and the vast destruction of stockholder value, urgent and decisive action is crucial.”
Brookdale did not reply to requests for comment as of press time.
The Brookdale shareholder meeting is scheduled for July 11.
The post With Brookdale Board Vote Looming, Activist Ortelius Makes Final Arguments appeared first on Senior Housing News.
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