Capital’s proposed deal with Conversant is “sub-optimal”: investors – Business Daily News
In light of Capital Senior Living’s amended and restated investment agreement on October 1 with Conversant Capital, the Dallas-based operator is once again faced with the backlash from Ortelius Advisors as well as an alternative proposal from Invictus Global Management.
Ortelius has opposed Conversant’s capital increase since its first announcement in August.
“The terms of the amended deal would further dilute shareholders, selling more of the company to Conservant at a higher price,” the investment group said in a PowerPoint presentation released Tuesday.
Ortelius Advisors has reiterated its willingness to support an equity offering of up to $ 70 million for Capital as an alternative to the operator’s fundraising plans with Conversant Capital and its subsidiaries.
“Our interactions with other investors lead us to believe that there is great interest in a rights offering that does not have the benefit of seed security, punitive dilution and change. impending control of the company, ”Ortelius said in the PowerPoint presentation. .
Meanwhile, Invictus provided detailed term sheets to Capital to provide a capital injection of $ 150 million, “which would be used to significantly lengthen the maturities of the company’s debt, allowing the company to continue its recovery. post-pandemic and facilitate its future growth, ”Amit Patel, a partner at Invictus, wrote Tuesday in an open letter to Capital CEO Kim Lody.
Patel called the Conversant transaction “sub-optimal” for shareholders.
“Upon completion of the Conversant transaction, Invictus is ready to fund the $ 25 million Invictus bridge loan, subject only to the usual and acceptable final documentation, which should not take more than seven days to negotiate and prepare.” , wrote Patel. “We are then ready to act quickly to finalize and close the $ 150 million in longer-term financing, part of which would replace the Invictus bridging loan, and believe the full package could be in place by January 31.”