Care Capital Properties Can’t Escape Securities Lawsuits

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Care Capital Properties, Inc. and a familiar lineup of co-defendants are facing another securities class action in the wake of a proposed acquisition by Sabra Health Care REIT, Inc., PR Sub, LLC, and Sabra Health Care Limited Partnership, who this time are also listed as defendants.

At issue in the lawsuit are allegations that the no solicitation clause, which prevents Care Capital from listening to alternative proposals, and $38.5 million termination fee included in the May 2017 merger agreement effectively lock up the transaction while precluding any other bidders from making competing offers to buy the company. Moreover, the complaint predictably claims the defendants submitted a false and incomplete registration statement to the US Securities and Exchange Commission that failed to include, among other items, defendant Sabra’s financial projects, analyses done by financial advisors complete with a fairness opinion, and the line items used in calculating unlevered free cash flows.