Sandpiper Group has revealed it owns more than 10 per cent of Extendicare Inc., and says it may buy more, as the private-equity firm sees long-term gains in retirement living facilities and home health care once the COVID-19 crisis subsides.
The Vancouver-based activist real estate investor said it raised its interest in Extendicare to 10.01 per cent, making it the largest shareholder. Sandpiper first disclosed a 9-per-cent position last year as chief executive Samir Manji joined the board of directors along with his nominee Norma Beauchamp.
Shares in Extendicare have been hit hard since the novel coronavirus spread in Canada, with extended care facilities frequently becoming the sites of outbreaks. As of last week, 13 of the company’s long-term care homes and two retirement communities had one or more positive cases; the company said the majority were limited to fewer than 10 residents or staff. Five long-term care homes that previously had outbreaks had been declared clear of the virus, it said in its first-quarter results.
Mr. Manji said the company has been working hard to deal with the crisis and provide care and safety for residents and employees. He said the stock price, which is down 30 per cent since the start of the year, is not reflective of the value of Extendicare, which operates 122 long-term care homes and retirement communities. It also provides home health care services.
Extendicare “has a very strong recurring revenue stream in most of those lines of business, and that stability we think will be sustained through and beyond COVID-19,” Mr. Manji said in an interview. “No doubt … one line of business that has been adversely impacted is ParaMed, the home health care business. But we’re confident that it will demonstrate resilience in the long term and will have a strong recovery and bounce-back.”
Depending on how the shares perform, Sandpiper “will not be shy” to add to its position in Extendicare now that it has a block that makes it an insider, he said.
The increase in its Extendicare stake comes after Sandpiper’s acquisition of a 10-per-cent interest in Dream Office Real Estate Investment Trust in late February.
Ontario issued a new emergency order on Wednesday to temporarily replace the management of some long-term care homes if they are struggling to contain COVID-19 outbreaks. Health Minister Christine Elliott says the measure is meant to strengthen protections for vulnerable seniors in those facilities.
The Canadian Press
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Jeffrey Jones