Hedge fund D.E. Shaw to oppose Diversified Healthcare Trust merger with OPI
12/06/2023 17:53
NEW YORK, June 12 (Reuters) - A second large Diversified
Healthcare Trust DHC.O shareholder is opposing the real estate
investment trust's merger with Office Properties Income Trust
OPI.O and is pushing the board to pursue better alternatives,
according to a regulatory filing.
Hedge fund D.E. Shaw, which owns a 6.1% stake in Diversified
Healthcare Trust, said in the filing on Monday that it told the
company privately last month that it planned to vote against the
deal. It also said its representatives met with board members
twice, in May and again last week, to underscore a "willingness
to work constructively" to find financing options.
Last month, Flat Footed LLC, which owns 9.4% of Diversified
Healthcare Trust, said the deal undervalues the REIT by 90% and
that there are better alternatives to an all-share deal.
Shareholders will be allowed to vote at a special meeting,
which has not yet been set.
A representative for Diversified Healthcare Trust did not
immediately respond to a request for comment and D.E. Shaw
declined comment beyond the filing.
Office Properties Income Trust (OPI) and Diversified
Healthcare Trust announced the merger in April, saying it will
create a more resilient company that will be better positioned
for growth.
DHC shareholders will receive 0.147 share of OPI common
stock for each DHC share, which represented an implied value of
$1.70 per common share on the day the deal was announced.
Flat Footed, in May, urged the board to consider various
strategic alternatives, including a sale of some assets.
DHC's stock price climbed 5.6% on Monday to trade at $2.81
at 1652 GMT.
(Reporting by Svea Herbst-Bayliss; Editing by Conor Humphries)
((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))