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Regional Health Properties, Inc. (OTCQB:RHEP), currently trading at $2.97 per share with a market capitalization of $6.66 million, reported in a press release statement filed with the SEC that it received two unsolicited acquisition proposals and is now facing a shareholder lawsuit related to its planned merger with SunLink Health Systems, Inc. According to InvestingPro data, the company has demonstrated strong revenue growth of 27.5% over the last twelve months.
According to the filing, on May 6, 2025, Regional Health Properties received an unsolicited proposal from a third party (“Party A”) to acquire all of its assets. The proposal included Party A assuming certain mortgage loans and paying $4.00 per share for Regional’s outstanding common stock. The board of directors reviewed the proposal on June 20, 2025, and determined it did not constitute a superior offer compared to the previously announced merger with SunLink. The board cited the structure of the offer, contractual obligations, and the value to shareholders as reasons for its decision.
A second unsolicited proposal was received on June 23, 2025, from another third party (“Party B”), offering to purchase up to 100% of Regional’s common stock at $4.25 per share via a tender offer. The board reviewed this proposal on July 10, 2025, and determined it was not a superior proposal, noting a lack of customary transaction details such as evidence of financing.
Regional’s board continues to recommend approval of the merger with SunLink, which was agreed to on April 14, 2025. The merger is subject to shareholder approval.
On July 11, 2025, a putative class action lawsuit was filed in the United States District Court for the Northern District of Georgia against Regional, its CEO, and certain directors. The lawsuit alleges violations of the Securities Exchange Act of 1934 related to disclosures and shareholder voting on the merger. An emergency motion for a preliminary injunction was also filed. Regional stated in the filing that it believes the claims are without merit but is supplementing its disclosures to avoid delays and minimize litigation risks.
The information in this article is based solely on a press release statement included in a recent SEC filing.
In other recent news, Regional Health Properties and SunLink Health Systems have extended the deadline for their proposed merger agreement to August 11, 2025. This decision was made because the necessary shareholder approvals could not be secured by the original deadline of June 30, 2025. The amendment to the merger agreement allows additional time for obtaining these approvals and includes a clarifying change to the agreement. Under the new terms, either company can terminate the merger if it is not completed by the new deadline. The merger, initially detailed in April 2025, would see SunLink merging with Regional Health Properties, with the latter remaining as the surviving corporation. Shareholder approval from both companies is still required for the merger to proceed. The joint proxy statement and prospectus will be filed with the SEC as part of a registration statement. Additionally, NYSE American LLC has filed to delist the common stock and Series A Redeemable Preferred Shares of both companies from its exchange.
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