World News: 13:00 GMT Wednesday 12th June 2019. [Five Star Senior Living Inc. via Businesswire via SPi World News]
today announced the results of its 2019 Annual Meeting of Stockholders held yesterday where, among other things, 83.9% of the shares voted were in favor of issuing Five Star common stock to Senior Housing Properties Trust (Nasdaq: SNH) and SNH’s shareholders, in satisfaction of the condition to restructuring Five Star’s business arrangements with SNH, as previously announced. Additional results from the annual meeting are outlined below in this news release.
Katherine Potter, Five Star’s President and Chief Executive Officer made the following statement:
“With yesterday’s vote, we reached an important milestone in completing our transaction with SNH and, when taken in combination with the new $65 million credit facility announced today, we believe these actions further solidify Five Star’s long-term financial outlook.”
“Our plan to complete a one-for-10 reverse stock split is designed to bring Five Star into compliance with Nasdaq listing standards, while allowing Five Star to target a broader group of investors, reduce trading costs for investors and lower administrative costs for the company.”
As previously announced, pursuant to the transaction agreement regarding the restructuring of Five Star’s business arrangements with SNH, effective January 1, 2020, the existing five master leases of 184 senior living communities (19,979 living units) that are leased to Five Star from SNH as well as the existing management agreements and pooling agreements with SNH affecting 77 communities (10,135 living units) will be terminated and replaced with new management agreements for all 261 senior living communities owned by SNH and operated by Five Star. Simultaneous with the conversion, Five Star will issue common stock to SNH and SNH’s shareholders such that their ownership of Five Star will be equal to approximately 34% and 51%, respectively, post issuance. At the same time, SNH will reduce Five Star’s indebtedness, if any, under the $25 million short term credit facility provided by SNH to Five Star in connection with the restructuring transaction, will assume certain of Five Star’s liabilities associated with the converted communities, or make a cash payment to Five Star, all of which, in aggregate, will total $75 million. There are currently no amounts outstanding under the SNH credit facility.
In addition, today Five Star announced it has reached agreement on a new $65 million senior secured credit facility. The maturity date of the facility is June 12, 2021, which can be extended for a one-year period subject to certain conditions, including the payment of an extension fee. The facility permits Five Star to elect Eurodollar rate advances, which accrue interest at LIBOR plus 250 basis points, or base rate advances, which accrue interest at a base rate plus 150 basis points. In addition, in certain circumstances, maximum commitments and borrowings under the facility may be increased to up to $165 million.
Citibank, N.A., and RBC Capital Markets are the Joint Lead Arrangers and Joint Lead Bookrunners for the credit facility. Banks participating in the credit facility are as follows:
|Citibank, N.A.||Administrative Agent|
|RBC Capital Markets||Syndication Agent|
|Wells Fargo Bank, National Association||Documentation Agent|
|PNC Bank, National Association||Lender|
|UBS AG, Stamford Branch, LLC||Lender|
Reverse Stock Split
Five Star also announced its intention to effect a reverse stock split of its issued and outstanding common stock at a ratio of one-for-10. The reverse stock split is currently expected to take effect at approximately 5:00 p.m. Eastern Time on September 30, 2019 (the “Effective Time”).
Accordingly, if the reverse stock split is completed at the Effective Time, every 10 issued and outstanding shares of our common stock would be converted into one share of common stock. As a result of the reverse stock split, it is expected that the number of outstanding shares of common stock will be reduced from 50,878,492 to 5,087,849 shares. No fractional shares will be issued in connection with the reverse share split. Instead, each stockholder that would otherwise be entitled to receive a fractional share will instead be entitled to receive, in lieu of such fractional share, cash in an amount equal to the relevant percentage of the product of a fraction of a share, multiplied by the closing price per share of our common shares, on a split-adjusted basis, as reported by Nasdaq on September 30, 2019. It is expected that the reverse stock split will bring Five Star in compliance with Nasdaq listing standards.
Additional Annual Meeting Results
Additional results from Five Star’s 2019 Annual Meeting of Shareholders were as follows:
Bruce M. Gans, M.D. was re-elected as an Independent Director in Group III. The final tabulation of the percentage of votes cast for this Independent Director is as follows:
Percentage of Shares Voted For
|Bruce M. Gans, M.D.||74.5%|
Stockholders ratified the appointment of RSM US LLP as Five Star’s independent registered public accounting firm to serve for the 2019 fiscal year.
Percentage of Shares Voted For
|Ratification of Independent Auditors||94.1%|
Five Star Senior Living Inc. is a senior living company that owns, leases and manages senior living communities, including primarily private pay independent and assisted living communities located throughout the U.S. Five Star is headquartered in Newton, Massachusetts.
Warning Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever Five Star uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, "will", “may” and negatives or derivatives of these or similar expressions, Five Star is making forward-looking statements. These forward-looking statements are based upon Five Star’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by Five Star’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Five Star’s control. For example:
The information contained in Five Star’s filings with the SEC, including under “Risk Factors” in Five Star’s periodic reports, or incorporated therein, identifies other important factors that could cause Five Star’s actual results to differ materially from those stated in or implied by Five Star’s forward-looking statements. Five Star’s filings with the SEC are available on the SEC’s website at.
You should not place undue reliance upon forward-looking statements.
Except as required by law, Five Star does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
Business Wire: 13:00 GMT Wednesday 12th June 2019
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