A New York-based investor has expressed interest in buying nursing home operator Diversicare Healthcare Services.
New York-based retirement assets manager MCS Plan and its manager Ephram “Mordy” Lahasky have offered to pay $10.10 for Diversicare’s shares, which closed Wednesday trading at $7.81, up $0.22 or 2.9%.
Tennessee-based Diversicare, which has 61 facilities in nine states, received a letter on Aug. 19 from Lahasky discussing the potential for a merger agreement.
Lahasky noted in the letter that he intended to let current management continue operating the business.
In an SEC filing made the same day Lahasky wrote that he and his staff “have developed a comprehensive set of best practices and procedures for the provision of care to the elderly.”
MCS Plan currently owns 5.2% of Diversicare’s stock, according to the filing.
“…Mr. Lahasky believes that centralization of management and the cost efficiencies from the amalgamation of the Diversicare facilities with his existing portfolio will enable them to deliver additional resources to the facilities through more efficient purchasing of goods and contracting for services,” Lahasky wrote.
He did not return a request for comment from Skilled Nursing News on Wednesday.
Diversicare’s board of directors issued a statement on Aug. 20, confirming that talks were ongoing with Lahasky.
“The Company has not established a definitive timeline to complete this review and no decision has been reached at this time,” Diversicare noted in the statement. “There can be no assurance that the review being undertaken will result in a business combination or a path different from the Company’s current strategic plan.”
Diversicare has hired Brentwood Capital Advisors to help evaluate the offer and any others.
Diversicare reported during its second quarter earnings call earlier this month a $10.8 million drop in patient revenues year-over-year, due to a 5% decrease in occupancy, compared to the second quarter of 2020.
Operational revenue was $111.3 million for the second quarter, down $7 million from the prior year’s period. Approximately $1.8 million in favorable Medicaid rate variances helped to mitigate losses.
About $6.4 million in COVID expenses were incurred during the second quarter ending June 30, CEO Jay McKnight said.