Gillian Tan, Columnist

Activists Can Be Deal-Breakers, Too

Opposition to Sabra Health Care REIT's takeover of larger REIT Care Capital Properties has merit.

July 25, 2017 at 11:30 AM UTC

Gillian Tan is a senior reporter covering finance and alternative asset classes including real estate, infrastructure, private equity, private credit, venture capital and sports business. She previously wrote an opinion column for Bloomberg and was a reporter at the Wall Street Journal. She is a qualified chartered accountant.

1500933529_pic — Photographer: Gallo Images

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We're all familiar with the classic textbook play by activist shareholders, the one involving taking a stake in a company, prompting management to explore strategic alternatives and -- if all goes to plan -- ending up with a fat premium from a sale.

Less common, but not unheard of, is the case where these shareholders oppose a deal and call for it to be scrapped altogether rather than altered or improved. That's what makes the efforts from hedge funds and occasional activists Eminence Capital and Hudson Bay Capital Management to squash Sabra Health Care REIT Inc.'s takeover of larger REIT Care Capital Properties Inc., notable.