In light of Capital Senior Living’s Oct. 1 amended, restated investment agreement with Conversant Capital, the Dallas-based operator is facing backlash again from Ortelius Advisors along with an alternative proposal from Invictus Global Management.
Ortelius has been against the capital raise from Conversant since it was first announced in August.
“The terms of the amended deal would further dilute stockholders, selling more of the company to Conservant at a steeper discount,” the investment group said in a PowerPoint presentation released Tuesday.
Ortelius Advisors reiterated its willingness to backstop an equity rights offering of up to $70 million for Capital as an alternative to the operator’s fundraising plans with Conversant Capital and its affiliates.
“Our interactions with other investors lead us to believe that there is ample interest in a rights offering which does not have the overhang of a priming security, punitive dilution and looming change-in-control of the business,” Ortelius stated in the PowerPoint presentation.
Meanwhile, Invictus provided detailed term sheets to Capital to provide a $150 million capital infusion, “which would be used to substantially extend the Company’s debt maturities, allowing for the company to continue its post-pandemic recovery and facilitating future growth,” Amit Patel, a partner at Invictus, wrote in an open letter Tuesday to Capital CEO Kim Lody.
Patel called the Conversant transaction “suboptimal” for shareholders.
“Upon termination of the Conversant transaction, Invictus stands ready to fund the $25 million Invictus Bridge Loan, subject only to customary and acceptable definitive documentation, which should take no more than seven days to negotiate and prepare,” Patel wrote. “We are then prepared to move expeditiously to complete and close the $150 million of longer-term financing, a portion of which would replace the Invictus Bridge Loan, and believe that the full package could be in place before January 31.”
