Court upholds Ventas’ deal to buy Sunrise

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Canadian court rules in favor of Ventas
Business First of Louisville – 4:09 PM EST Tuesday, March 6, 2007

A court in Canada has ruled in favor of Ventas Inc. in a case involving the company’s planned purchase of Sunrise Senior Living Real Estate Investment Trust for $1.8 billion, including the assumption of debt.

Ventas had filed a petition with the Ontario Superior Court after a rival bidder, Health Care Property Investors Inc., tried to buy Sunrise, which owns or has interest in 74 health care properties.
Health Care Property submitted a bid, offering a 20 percent premium over Ventas’ bid after Ventas was declared the winning bidder in an auction that also included California-based Health Care Property Investors.

As the winning bidder, Ventas claimed Health Care Property was bound by a “standstill agreement” that was signed as part of the auction process that prevented it from acquiring Sunrise’s REIT assets for 18 months and asked the court to force Sunrise REIT to enforce that agreement.

Both Health Care Property and Sunrise REIT also filed petitions that asked the court make rulings on the contracts that would allow the companies to negotiate.

In a ruling late Monday, Justice Sarah Pepall ruled that Sunrise is obligated to enforce the standstill agreement and other contracts with Health Care Property based on its purchase agreement with Ventas.

“It seems to me the clear scheme of this purchase agreement was (to) ensure enforcement of standstill agreements that had been signed as part of the auction process,” she wrote in her decision. “This was part of the package negotiated between (Ventas) and Sunrise REIT.”

She noted that if shareholders of Sunrise REIT reject Ventas’ offer, the purchase and standstill agreements no longer will be in effect.

Louisville-based Ventas (NYSE: VTR) is a health care real estate investment trust. It owns properties such as independent and assisted-living facilities, skilled-nursing facilities, hospitals and medical office buildings in 43 states.

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