Health Care Property Investors Inc. says that it plans to buy another health care real estate investment trust in a $3.5 billion cash-and-stock deal that would create the nation’s largest public REIT specializing in health care properties.
Long Beach-based Health Care Property will pay $13.50 for each share of Orlando, Fla.-based CNL Retirement Properties Inc. The company also will assume or refinance about $1.6 billion of CNL’s debt, raising the total value of the transaction to $5.2 billion.
A separate management company, CNL Retirement Corp., also is being purchased by HCP for 4.4 million shares of Health Care Property stock, or around $120 million. Each acquisition is conditioned on the consummation of the other.
Health Care Property shares were down 2.4 percent to $26.20 last week.
CNL owns about 262 properties in 33 states, according to year-end figures. Following the purchase, which the company expects to close in the third quarter, Health Care Property said it would own nearly 800 properties in 44 states. That would be the nation’s largest portfolio of independent and assisted living communities, health-care facilities and medical office buildings.
“This transaction takes HCP to the next level and dramatically alters the healthcare real estate industry landscape,” Chief Executive James F. Flaherty III said in a statement.
The boards of both companies have approved the acquisition, which still requires approval by CNL shareholders. At the time of the closing, CNL shareholders would receive for each of their shares $11.13 cash and 0.0865 of a share of Health Care Property common stock.
Giuliani Acquisition
Imperial Capital LLC, a boutique investment bank, has acquired the San Francisco operations of Giuliani Capital Advisors LLC, and has hired seven Giuliani executives as part of an expansion in San Francisco and Los Angeles.
Marc Bilbao, managing director of Giuliani Capital, joins Los Angeles-based Imperial as a managing director of its corporate finance and restructuring advisory group in Los Angeles. Scott Farnsworth, a former Giuliani Capital director, joins Imperial as a vice president in Los Angeles.
Five Giuliani executives in San Francisco joined Imperial to focus on growing its corporate finance and restructuring advisory services as well as its high-yield, bank loan, equity sales and trading business in San Francisco.
They include Eric Carlson, who will be managing director of the San Francisco office; Jason Thomas, named senior vice president; and Barbeau Roy, who will be a vice president.
Imperial Capital, a broker-dealer in the secondary trading of high-yield, bank loan and distressed debt, has roughly 100 employees in its three offices in Los Angeles, New York and San Francisco.
Magnetic Sale
Bell Industries Inc. has sold substantially all of the assets, excluding real estate, of its J.W. Miller division to Bourns Inc. for around $8.5 million in cash, the El Segundo-based company said last week.
J.W. Miller, which is based in Gardena, manufactures and distributes a variety of standard and custom magnetic components used in electronic applications for computer, medical and telecommunications equipment. The unit had sales of approximately $8.4 million in 2005.
“J.W. Miller is our smallest business unit, and the sale to Bourns is in keeping with our strategy of focusing on core business operations and aligning our resources to become leaders in the key markets we serve,” said Bell Chief Executive John Fellows.
Bourns, a privately held company based in Riverside, manufactures electronic components for a broad range of markets.
Probe Wrapped Up
The U.S. Securities and Exchange Commission has ended an informal investigation into trading in the stock of computer animated film maker DreamWorks Animation SKG Inc. prior a 2005 earnings release, and recommended that the commission take no enforcement action.
The nearly yearlong inquiry concerned a potential connection between trading in the Glendale-based company’s securities and the disclosure of first-quarter financial results on May 10, 2005. After the market closed that day, DreamWorks reported lower-than-expected earnings on disappointing DVD sales for “Shrek 2” and “Shark Tale.”
DreamWorks earlier had overestimated “Shrek 2” DVD sales by between 3 million to 5 million copies. The government reportedly was looking into whether DreamWorks should have been quicker to inform investors that sales were not meeting expectations, and whether employees were aware of the problem prior to the earnings release. (Crowe)
Broadband Expansion
CBS Corp. launched a free broadband entertainment channel sent over the Internet last week called Innertube, which will carry advertising, network content and original programming. Several national advertisers have already signed on.
Content will include movies, comedies, dramas and shows tailored specifically to Internet distribution. Material will come from CBS Entertainment, King World, CBS Paramount Network Television, CBS Paramount Domestic Television and Showtime. Some shows which have failed to generate ratings on the network may find a home there, too.
“With this broadband channel, we’ve essentially bypassed cable and created a general entertainment outlet utilizing existing creative and content resources,” said CBS Corp. President and Chief Executive Les Moonves in a statement.
Several shows are slated for launch on the channel this month, including “Greek to Chic,” a reality series based on makeovers for college students, and a scripted sketch-comedy series called “BBQ Bill.”
Subscriber, Profit Growth
DirecTV Group Inc. posted a first-quarter profit of $235 million, compared with the El Segundo-based satellite television provider’s loss of $41 million a year ago. DirecTV’s profit was 17 cents per share, compared with a 3 cents-per-share loss a year ago.
Revenue increased 8 percent to $3.4 billion, largely on the addition of 255,000 new subscribers in the first quarter and subscriber spending on premium services like digital video recorders and high-definition television.
DirecTV had 15.4 million subscribers at the end of the quarter, up 7 percent from a year earlier.
Emily Bryson-York, Kate Berry, Deborah Crowe, Anne Riley-Katz
