CHICAGO (Reuters) - Shares in Genesis Healthcare Inc and Brookdale Senior Living Inc, two of the largest U.S. nursing home operators, plummeted on Thursday after separate announcements that reinforced investors’ fears of a bumpy industry outlook.
Shares of Genesis slid 21.25 percent to $1.26 as the company’s landlords warned on investor conference calls that skilled nursing facilities like those operated by Genesis will continue to suffer from cost pressure and low occupancy rates in the near term.
That overshadowed an agreement that Genesis reached to boost liquidity by $70 million and cut fixed costs by reducing lease payments by $54 million annually.
Highly leveraged U.S. nursing homes are struggling with dwindling government reimbursements for care and changing regulations that increase costs of care. Their struggles have weighed on their landlords, the healthcare real estate investment trusts that own their facilities, such as Welltower Inc and Sabra Health Care REIT Inc
Shares of Brookdale fell 19 percent to $7.18, a nine-year low, after the company rejected a $9 per share buyout offer and said it believed it could create more value under a new chief executive after ending a year-long strategic review.
Reporting by Tracy Rucinski; Editing by Chris Reese