Brookdale Senior Living backs its board against Ortelius’ challenge

NASHVILLE, Tenn. - Brookdale Senior Living Inc. (NYSE: BKD), a leading operator of senior living communities with a market capitalization of $1.5 billion and annual revenue exceeding $3 billion, has urged its shareholders to support the current board of directors in the face of a challenge from Ortelius Advisors, L.P., which owns about 1% of the company’s shares. Brookdale has highlighted the qualifications of its own board nominees and criticized the Ortelius candidates as lacking relevant expertise. According to InvestingPro data, the company currently trades above its Fair Value, suggesting careful consideration is needed regarding its governance direction.

The company, which is set to hold its Annual Meeting on July 11, 2025, has mailed a letter to shareholders emphasizing the board’s role in overseeing the execution of the company’s strategy and searching for a new CEO. The letter points out that the board has been significantly refreshed with four new directors who bring valuable real estate, healthcare, operations, and senior housing experience.

Brookdale’s board consists of eight nominees, including seven independent members with an average tenure of less than four years. The board has implemented corporate governance best practices such as annual elections, policies against hedging and pledging of securities, and fully independent standing committees.

In contrast, the press release states that Ortelius’ nominees do not offer additional experience in critical areas such as healthcare, hospitality, or sales and marketing. It suggests that electing Ortelius’ candidates could put shareholders’ investments at risk and potentially derail the company’s progress.

The letter also mentions Brookdale’s recent performance improvements, including positive adjusted free cash flow and an increase in consolidated weighted average occupancy year-over-year. It argues that Ortelius’ comparisons and criticisms of the company omit the most relevant peer, Sonida Senior Living, Inc., which Brookdale has outperformed. However, InvestingPro analysis reveals some concerning metrics, including a significant debt burden and rapid cash burn rate. The company’s revenue growth stands at 4.1%, though analysts have revised earnings estimates upward for the upcoming period. For deeper insights into Brookdale’s financial health and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Brookdale’s board asserts that it is best suited to continue driving value creation and enhancing shareholder value, and it encourages shareholders to vote for only Brookdale’s nominees on the BLUE proxy card. With current debt-to-capital ratio at 0.79 and a challenging current ratio of 0.82, the company faces significant financial hurdles ahead. The company has made it clear that this information is based on a press release statement. InvestingPro subscribers can access additional insights, including 8 more ProTips and comprehensive financial metrics, to make more informed investment decisions.

In other recent news, Brookdale Senior Living reported its first-quarter 2025 earnings, revealing a larger-than-expected loss per share and slightly missing revenue forecasts. The company posted an earnings per share (EPS) of -$0.28, falling short of the anticipated -$0.13, and revenue came in at $813.86 million, narrowly missing the forecast of $814.73 million. Despite these results, Brookdale raised its adjusted EBITDA guidance for 2025 to a range of $440-$450 million, indicating confidence in its operational strategy. Meanwhile, RBC Capital Markets adjusted its outlook on Brookdale by increasing the price target from $8.00 to $9.00, maintaining an Outperform rating, and expressing optimism about the company’s future. Additionally, activist investor Ortelius Advisors has filed proxy materials to elect its six director nominees at Brookdale’s upcoming annual meeting, citing concerns over the company’s governance. Ortelius is advocating for changes in leadership to align Brookdale’s decision-making with shareholder interests. These developments come as Brookdale navigates a CEO transition, which typically introduces uncertainty into a company’s outlook.

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