Item 1. Subject Company Information
The name of the subject company is CNL Healthcare Properties, Inc., and the address and telephone number are 450 South Orange Avenue, 14th Floor, Orlando, Florida 32801 and (407) 650-1000, respectively.
The title of the class of equity securities to which the tender offer relates is the shares of the Company’s common stock, $0.01 par value per share. As of the close of business on November 11, 2021, there were 173,960,540 shares of the Company’s common stock issued and outstanding.
Item 2. Identity and Background of Filing Person
The Company is the person filing this Schedule 14D-9. The Company’s name, business address and business telephone number are set forth in Item 1 above, which information is incorporated herein by reference.
This Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) is being filed by CNL Healthcare Properties, Inc., a Maryland corporation (the “Company”), with respect to an unsolicited tender offer by Comrit Investments 1, LP, a Cayman Islands Exempted Limited Partnership (the “Offeror”) to purchase up to an aggregate of 8,785,000, or approximately 5.05%, of the issued and outstanding shares of common stock (the “Shares”) of the Company for a price equal to $4.50 per share, without interest, in cash (the “Comrit Offer”).
According to the Offeror’s Schedule TO, its business address is 9 Ahad Ha’am Street, Tel Aviv, Israel 6129101 and its phone number is +972-3-519-9936.
Item 3. Past Contacts, Transactions, Negotiations and Agreements
To the knowledge of the Company, as of the date of this Schedule 14D-9, there are no material agreements, arrangements or understandings or any actual or potential conflicts of interest between the Company or its affiliates and the executive officers, directors or affiliates of the Company, except for agreements, arrangements or understandings and actual or potential conflicts of interest discussed in Item 13. “Certain Relationships and Related Transactions, and Director Independence,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the United States Securities and Exchange Commission (“SEC”) on March 15, 2021 (“2020 Annual Report”) and in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Related Party Transactions” in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2021 filed with the SEC on November 12, 2021 (“September 30, 2021 Quarterly Report”), which information is incorporated herein by reference.
To the knowledge of the Company, as of the date of this Schedule 14D-9, there are no material agreements, arrangements or understandings or any actual or potential conflicts of interest between the Company or its affiliates and the Offeror and its executive officers, directors or affiliates.
Item 4. The Solicitation or Recommendation
(a) Solicitation or Recommendation
On November 16, 2021, the Board of Directors (“Board”), after careful evaluation of the Comrit Offer and in consultation with the Company’s management and outside advisors, has determined, for the reasons set forth below, to recommend that the Company’s stockholders REJECT the Comrit Offer.
(b) Reasons for the Recommendation
In 2017, the Company began evaluating strategic alternatives to provide liquidity to stockholders. To further that initiative, a special committee of the Board was constituted in April 2018 to consider possible strategic alternatives, and the special committee of the Board hired two investment banking firms in June 2018 to act as financial professionals to assist with the exploration and execution of possible strategic alternatives. The special committee of the Board continues to be represented by KeyBanc Capital Markets Inc. in such capacity.
In September 2018, in furtherance of its consideration of the Company’s strategic alternatives, the Board sold the Company’s MOB/Healthcare Portfolio, a portfolio of 63 properties consisting of 53 medical office buildings, five post-acute care facilities and five acute care hospitals across the United States. During 2019 and the first six months of 2020, the Company sold the 53 medical office buildings and eight of the additional properties and made a special distribution to stockholders of $2.00 per share in June 2019. The Company has since sold an additional hospital and