Ventas, Sunrise Senior Living amend purchase agreement, transaction should close by April 26

By Lisa Kerner

Charlotte, N.C., April 11 - Ventas, Inc. and Sunrise Senior Living Real Estate Investment Trust agreed to amend their Jan. 14 purchase agreement to reflect an increase in the amount payable to unitholders of Sunrise to C$16.50 from C$15.00 per unit.

Ventas' 10% purchase price increase is a 57% premium over the volume-weighted average trading price of Sunrise's units on the Toronto Stock Exchange for the 20-day period immediately preceding the announcement of the original transaction in January.

The total value of the transaction, including debt, is valued at about $1.97 billion, according to a company news release.

Sunrise will hold a special meeting of unitholders to consider the proposed transaction on April 19 in Toronto. Unitholders as of Feb. 19 are entitled to vote at the meeting. The "outside date" for the transaction has been extended to June 30 from May 31.

Both the Sunrise special committee and board of trustees are recommending that unitholders vote for the proposed Ventas transaction.

"We continue to be excited about the Sunrise REIT portfolio and development pipeline, which offer us diversification, high-quality, private pay and growth benefits," Ventas chairman, president and chief executive officer Debra A. Cafaro said.

"It is important to underscore, however, that C$16.50 is Ventas' 'best and final' price; if we do not complete this transaction at this price, we will focus our attention on the other attractive acquisition opportunities in our pipeline."

The transaction will add 77 private pay assisted living communities in the United States and Canada to Ventas' portfolio and includes the exclusive right of first offer to acquire other newly developed assets in Canada and portions of the United States.

If the purchase agreement is terminated for any reason other than a breach by Ventas, Sunrise has agreed to reimburse Ventas for up to C$10 million in expenses under the amended agreement. Both companies have also agreed to settle the outstanding litigation filed by Ventas against Sunrise following the close of the transaction, expected on or about April 26.

On April 5, Ventas said it was seeking unspecified damages from Sunrise in the Ontario Superior Court of Justice as the result of breaches by Sunrise of its standstill enforcement obligations in the purchase agreement between Ventas and Sunrise.

In March, the Ontario Court of Appeal upheld an earlier decision declaring that Sunrise must comply with its covenants in its purchase agreement with Ventas to enforce Sunrise's rights under its confidentiality agreement with Health Care Property Investors, Inc.

The court also upheld Ventas' request for a declaration that the standstill terms in the confidentiality agreement between Sunrise and Health Care Property are in effect, a news release stated.

Health Care Property's several offers, all since withdrawn, are considered breaches of its standstill agreement with Sunrise, which prohibits it from making any proposal to acquire any assets of Sunrise through May 2008.

Sunrise Senior Living, Inc., the developer of most of the acquired Sunrise assets, will remain as the manager of all of the properties under the existing long-term management contracts.

Toronto-based Sunrise was formed to indirectly acquire and own senior living communities.

Ventas is a Louisville, Ky., health care real estate investment trust.

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