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New bidder for QCP puts ProMedica, Welltower plan in question

An additional, unnamed bidder has emerged for HCR ManorCare, a development that could upend the blockbuster $3.3 billion offer from ProMedica and Welltower Inc. to purchase both the business and real estate of the nation’s second largest nursing home chain.

Terms of that new offer haven’t been made public. But on Tuesday, officials from Quality Care Properties Inc. — the real estate investment trust that effectively controls the fate of bankrupt Toledo-based ManorCare — said it is potentially superior to the agreement struck in April with ProMedica and Welltower.

Quality Care Properties is HCR ManorCare’s primary landlord and has been in the process of acquiring the company through a prepackaged Chapter 11 bankruptcy.

The April deal called for Welltower, the Toledo-based real estate investment trust, to buy QCP for $20.75 per share in cash. ProMedica would simultaneously buy ManorCare for $300 million in cash and assume $1.1 billion in ManorCare debt. ProMedica and Welltower would then form a joint venture to hold ManorCare’s real estate, which would lease the property back to ProMedica.

Not only would that keep ManorCare’s headquarters in Toledo, it would make ProMedica the nation’s 15th largest not-for-profit health system by revenue.

The announcement that there’s another bidder for QCP and HCR ManorCare comes at the end of a 45-day period in which QCP was permitted to solicit and consider alternative acquisition offers. 

“We are aware that Quality Care Properties Inc. has received another offer,” ProMedica spokesman Tausha Moore said in a written statement. “We think the Welltower/ProMedica joint offer is competitive and would provide the greatest value to QCP’s shareholders.”

A spokesman for Welltower told The Blade via email that the company would not comment beyond what was already made public by QCP. 

“Both Welltower and the QCP board believe the Welltower bid is the superior bid at this point,” wrote Tim McHugh, who is Welltower’s vice president of finance and investments.

QCP noted in its Tuesday statement that the board hasn’t yet changed its recommendation that shareholders support the Welltower offer. The new party, QCP said, would still need to obtain debt financing and complete a due diligence review of QCP and HCR ManorCare.

Should QCP decide the new offer is in fact superior to Welltower’s offer, the Toledo firm would have four business days to match it. Welltower would also be entitled to a $20 million breakup fee from QCP if the Maryland-based company terminates the deal. 

A spokesman for HCR ManorCare declined to comment.

Blade staff writer Lauren Lindstrom contributed to this report. 

Contact Tyrel Linkhorn at tlinkhorn@theblade.com419-724-6134, or on Twitter @TyrelLinkhorn.

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