DEFA14A: CNL Healthcare Properties Seeks Approval for Sonida Merger

CNL Healthcare Properties files definitive proxy statement urging stockholders to approve its proposed $1.8 billion merger with Sonida Senior Living, Inc. for full liquidity.

Summary

• Stockholders of CNL Healthcare Properties (CHP) are urged to vote on the proposed merger with Sonida Senior Living, Inc. (Sonida), following a merger agreement signed on November 4, 2025.
• Approval of the transaction will provide stockholders with full and real-time liquidity through a combination of cash and stock upon closing.
• CHP's board of directors, upon recommendation of the special committee, has approved the transaction and recommends stockholders vote FOR the transaction proposal and all other proposals.
• The transaction is valued at approximately $1.8 billion, equating to an estimated consideration of $6.90 per common share.
• The per-share consideration is comprised of $2.32 in cash (34%) and an estimated $4.58 per common share (66%) in unrestricted, freely tradable Sonida common stock.
• The Sonida stock portion is subject to a two-way collar mechanism, with an expected value of $4.58 per CHP share within a range of $22.73 and $34.76 for Sonida's volume-weighted average price.
• The $6.90 per share consideration represents a premium to the $6.64 midpoint of the most recent estimated net asset value per share as of December 31, 2024.
• The Annual Meeting of Stockholders will be held on March 6, 2026, with stockholders of record as of December 30, 2025, entitled to vote.
• The transaction requires approval from holders of a majority of the outstanding shares of CHP common stock; without this, the transaction will not proceed, and CHP will pursue other strategic liquidity alternatives.
• The transaction is anticipated to close in late-first quarter or early-second quarter of 2026, subject to stockholder approval, governmental and third-party consents, and other customary closing conditions.

Sentiment

Score: 8

Explanation: The filing outlines a recommended merger offering a premium over NAV and full liquidity to shareholders. While standard M&A risks are present, the board's strong endorsement and the favorable terms suggest a positive outcome for investors.

Positives

• The transaction offers stockholders an opportunity for full and real-time liquidity.
• CHP's board of directors and special committee have approved and recommended the transaction.
• The transaction is valued at approximately $1.8 billion.
• The estimated transaction consideration is $6.90 per common share.
• The consideration includes a substantial cash component of $2.32 per share (34%).
• The consideration includes unrestricted, freely tradable Sonida common stock valued at an estimated $4.58 per share (66%).
• The $6.90 per share consideration represents a premium to the $6.64 midpoint of the most recent estimated net asset value per share as of December 31, 2024.

Negatives

• Failure to obtain majority stockholder approval will result in stockholders not receiving the transaction consideration, and CHP will pursue unspecified alternative strategic liquidity options.
• The actual closing price of Sonida shares on the day of closing may vary from the volume-weighted average price used for calculating the number of shares issued.
• No fractional Sonida shares will be issued; stockholders will receive cash in lieu of any fractional shares.

Risks

• The occurrence of any event, change, or other circumstances that could lead to the termination of the Merger Agreement.
• The nature, cost, and outcome of any litigation and other legal proceedings, including those related to the Transactions, that may be instituted against the parties.
• The inability to consummate the Transactions within the anticipated time period, or at all, due to failure to obtain requisite stockholder approval, regulatory approvals, or other conditions.
• The proposed Transactions may disrupt current plans and operations of CNL Healthcare Properties or divert management's attention from its ongoing business.
• The ability to recognize the anticipated benefits of the Transactions.
• The amount of the costs, fees, expenses, and charges related to the Transactions.
• The risk that the Merger Agreement may be terminated under circumstances requiring CNL Healthcare Properties to pay a termination fee.
• The effect of the announcement of the Transactions on the ability of CNL Healthcare Properties to retain and hire key personnel and maintain relationships with its tenants and other business partners.
• The effect of the announcement of the Transactions on CNL Healthcare Properties' operating results and business generally.
• Other risks and important factors detailed in the Joint Proxy Statement/Prospectus, CNL Healthcare Properties' SEC filings (e.g., Form 10-K, 10-Q, 8-K), and Sonida's SEC filings (e.g., Form 10-K).

Future Outlook

The transaction is anticipated to close in late-first quarter or early-second quarter of 2026, contingent on stockholder approval, governmental and other third-party consents, and satisfaction of customary closing conditions. If approved, stockholders will achieve full and real-time liquidity. If the transaction is not approved, CNL Healthcare Properties will pursue other strategic liquidity alternatives.

Management Comments

• CHP's board of directors, upon recommendation of the special committee, approved the transaction and recommended that stockholders vote FOR the transaction proposal and all other proposals.
• CHP encourages you to inform your clients about the proxy materials and the importance of voting their shares as quickly as possible.
• Without majority approval, stockholders will not receive their transaction consideration, and CHP will have to forego this liquidity event and pursue other strategic liquidity alternatives.

Industry Context

This proposed merger highlights ongoing consolidation and strategic realignments within the senior living and healthcare real estate sectors. Companies like CNL Healthcare Properties, often structured as REITs, frequently seek to optimize shareholder value through liquidity events, especially in dynamic market conditions. The acquisition by Sonida Senior Living, an operator in the space, suggests a strategic move towards expanding its portfolio or achieving vertical integration, leveraging current market conditions for growth and operational synergies.

Comparison to Industry Standards

• NA

Corporate Governance

Stakeholder Impact

• Shareholders: Will receive full and real-time liquidity through a combination of cash and Sonida stock, valued at $6.90 per share, representing a premium over the estimated net asset value. However, failure to approve the merger means foregoing this liquidity event.
• Management and Employees: Face potential disruption to current plans and operations, and there is a risk to the company's ability to retain and hire key personnel.
• Tenants and Business Partners: There is a risk to maintaining existing relationships with tenants and other business associates due to the transaction.

Next Steps

• Stockholders are required to vote on the transaction proposal, director election, auditor ratification, and adjournment proposal.
• Broadridge Investor Communications Solutions will continue to solicit proxies from unvoted stockholders.
• The Annual Meeting of Stockholders is scheduled for March 6, 2026.
• The transaction is anticipated to close in late-first quarter or early-second quarter of 2026.
• Additional operational and tax information regarding the receipt of transaction consideration will be shared with stockholders in the coming weeks.

Key Dates

Recommendation

The board of directors, including a special committee, has unanimously recommended this merger, which offers a significant premium over the company's estimated net asset value per share ($6.90 vs. $6.64). The transaction provides full and real-time liquidity to stockholders through a combination of cash and freely tradable stock in Sonida Senior Living. This represents a clear and favorable exit for shareholders, making it a strong buy for those seeking to capitalize on the merger premium.

Keywords

CNL Healthcare Properties, Sonida Senior Living, merger, acquisition, proxy statement, shareholder vote, liquidity, senior living, healthcare real estate, REIT, stock consideration, cash consideration, corporate governance, SEC filing, DEFA14A