- Ortelius Advisors pushes for significant changes at Brookdale Senior Living (BKD, Financial) to unlock shareholder value.
- The departure of former CEO Cindy Baier marks the beginning of Ortelius' campaign for Board and management accountability.
- Ortelius proposes strategic measures including monetizing underperforming properties and reducing debt.
Ortelius Advisors, L.P. has issued an open letter to the stockholders of Brookdale Senior Living Inc. (BKD), highlighting a strategic pathway to enhance shareholder value after seven years of underperformance. During this period, Brookdale's stock price plummeted by 39%, significantly underperforming market benchmarks by 165 percentage points. Additionally, the company experienced a decline in occupancy rates from 85.2% to 79.4%, lagging behind industry standards.
In response, Ortelius has nominated six independent director candidates for the 2025 Annual Meeting, aiming to replace the current board to implement significant changes. The departure of long-time CEO Cindy Baier, as announced by the Board, is seen by Ortelius as only a preliminary step towards accountability.
Ortelius has outlined strategic initiatives to rejuvenate Brookdale, including monetizing underperforming properties, reducing mortgage debt, and exploring strategic alternatives. Additionally, the firm suggests eliminating the leased portfolio and focusing on high-performing properties to boost operating income and valuation. These measures are intended to increase the company's market competitiveness and enhance long-term shareholder value.
Ortelius believes that the GoodCo owned properties’ equity could be worth billions, far exceeding Brookdale’s current market capitalization. The proposed board refreshment is also reflected in the stock price, which saw an 8% increase following Ortelius' candidate nominations, and another 9% rise upon the announcement of the CEO's departure.
The firm remains committed to its path of holding the board accountable and maximizing stockholder value through strategic actions and governance improvements. Ortelius encourages shareholders to support their nominees, who bring extensive experience across various relevant sectors, to drive meaningful change at Brookdale.
