In recent months, the market has lost companies in a wide array of sectors such as biopharmaceuticals and REITs to private equity action. We can now add nursing homes to that list. Monday, The Carlyle Group said its proposed takeover of Manor Care
The Manor Care takeover will be an all-cash transaction valued at about $6.3 billion. Holders will receive $67.00 in cash for each share of common stock, a 20% premium to Manor Care's closing price of $55.75 on April 10. The next day, the company announced that it would evaluate strategic alternatives, which means selling or restructuring itself.
This transaction highlights the prospects for long-term care facility stocks in general. Shares of Manor Care had already appreciated 18.7% in 2007 before its announcement about strategic alternatives. The company reported robust earnings for fiscal 2006 in January and strong 2007 Q1 earnings growth in April.
I wouldn't advise Fools to buy into this industry solely on the hopes that one's investment becomes a takeover target, but there are some strong performers still left standing in the industry. One such play is Sunrise Senior Living
Another one to consider is Brookdale Senior Living
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