Land & Buildings Issues Presentation Outlining Opposition to Healthcare Realty Trust’s Proposed Acquisition of Healthcare Trust of America

Rhea-AI Summary

Land & Buildings Investment Management opposes Healthcare Realty's merger with Healthcare Trust of America (NYSE: HTA) and intends to vote against the deal at the July 15 Special Meeting. They argue that HTA's lower quality portfolio and higher debt levels will negatively impact HR's valuation. Moreover, they criticize HR's management for not engaging with Welltower, whose all-cash offer provides a 28% premium over HR's current share price. Investor disapproval is evident, with an 11% drop in share price following the merger announcement.

Positive

• None.

Negative

• Lack of strategic rationale for HR shareholders due to HTA's lower quality assets and higher debt.
• HR management's refusal to engage with Welltower regarding its all-cash offer, despite its higher valuation.
• Underperformance of HR management over 1-, 3-, and 5-year periods raises concerns about future performance.
• Investor disapproval shown by an 11% drop in HR share price after HTA merger announcement.

Calls Out Flawed Process and HR’s Unwillingness to Engage with Welltower in Spite of What L&B Believes is WELL’s Superior Cash Offer With a 28% Premium to Current Share Price

Believes Proposed Merger Would Lower HR’s Valuation Given HTA’s Lower Quality Portfolio and Higher Debt Levels

Intends to Vote AGAINST the HTA Merger – Which Requires 2/3 Support from HR Shareholders – at July 15 Special Meeting

STAMFORD, Conn.--(BUSINESS WIRE)-- Land & Buildings Investment Management, LLC (together with its affiliates, “Land & Buildings”), a significant shareholder of Healthcare Realty Trust, Inc. (NYSE: HR) (“Healthcare Realty”, “HR”, or the “Company”), today issued an investor presentation outlining its opposition to the Company’s proposed merger with Healthcare Trust of America, Inc. (NYSE: HTA) ("HTA"), and its intention to vote against the deal at the July 15 Special Meeting.

The presentation can be viewed here.

Land & Buildings’ rationale for voting against the deal include:

• Lack of Strategic Rationale for HR Shareholders: HR’s valuation will likely be negatively impacted by HTA’s historical trading valuations and lower quality assets.
• Flawed Process and Evaluation of Welltower Proposal: Welltower's offer for HR is 28% higher than the current share price and is in line with the fairness opinions in HR’s proxy for its merger with HTA – yet HR management refused to engage on a potential deal. Highlights other flaws in the process, including potential conflicts of interest with HR management and Board.
• History of Underperformance: HR’s current management has overseen underperformance over the past 1-, 3-, and 5-year time periods – and there is no compelling reason why that would change post-merger.
• Investor Disapproval of Deal: HR shareholders lack confidence in the merits of the deal, made clear by the 11% share price drop following the HTA merger announcement.

Jonathan Litt, Founder and Chief Investment Officer of Land & Buildings stated: “We see little strategic rationale for Healthcare Realty’s acquisition of Healthcare Trust of America and find it puzzling that HR rejected Welltower’s all-cash offer to pursue a value-destructive transaction. Numerous other HR shareholders that we have spoken to plan to vote against the deal, and we believe it will be difficult to reach the 2/3 threshold necessary for approval at the July 15 Special Meeting. We encourage the Board of Directors to seriously reconsider whether the path it has chosen is the right one for all shareholders.”

Land & Buildings urges HR shareholders to vote AGAINST the proposed merger with HTA at the upcoming Special Meeting.

Please note: this is NOT a proxy solicitation. Land & Buildings is not asking for your proxy card and cannot accept your proxy card. Please DO NOT send us your proxy card. Executed proxy cards should be returned according to HR’s instructions.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220615005741/en/

Media Contact

Longacre Square Partners

Dan Zacchei

dzacchei@longacresquare.com

Investor Contact

Saratoga Proxy Consulting

John Ferguson

(212) 257-1311

Source: Land & Buildings Investment Management, LLC

FAQ

What is Land & Buildings' position on the HR and HTA merger?

Land & Buildings opposes the merger and plans to vote against it at the July 15 Special Meeting.

Why does Land & Buildings believe the HR and HTA merger is detrimental?

They argue the merger will lower HR's valuation due to HTA's inferior asset quality and debt levels.

What alternative offer was rejected by Healthcare Realty's management?

HR's management rejected Welltower's all-cash offer, which was 28% higher than HR's current share price.

What has been the market reaction to the proposed HTA merger?

HR's share price dropped by 11% following the announcement of the merger with HTA.

What is the required shareholder support for the HTA merger?

The merger requires 2/3 support from HR shareholders at the July 15 Special Meeting.