Capital Senior Living Agrees to Install New Board Member for Activist Shareholder Lucus Advisors

by Jeff Shaw

DALLAS — Capital Senior Living Corp. (NYSE: CSU) has agreed to appoint a new, independent board member under the guidance of Lucus Advisors, an activist shareholder that has been publicly calling for a sale or other major changes to the company.

Under the agreement reached, Lucus will recommend up to two candidates for the CSU board. CSU will present its recommended director nominees in the company’s definitive proxy statement to be filed with the Securities and Exchange Commission and mailed to all stockholders eligible to vote at the 2016 annual meeting, which has yet to be scheduled.

“The board of directors of Capital Senior Living Corp. regularly reviews the composition of our board with the goal of adding new perspectives for the benefit of all of our stockholders,” stated Lawrence Cohen, CEO and director of Capital, in a press release. “We share Lucus’ desire to maximize shareholder value and look forward to working productively with Lucus and our other shareholders to do so.”

Lucus, a New York City-based investment management firm, issued a press release in December claiming the Dallas-based seniors housing owner/operator was undervalued in the stock market. In the release, signed by Schuster Tanger, a managing partner with Lucus, the shareholder called for either an outright sale or other “strategic initiatives.”

The release issued by Lucus suggested that a strong credit market combined with high real estate acquisition prices would allow CSU to be sold well above its stock price value. As of Oct. 9, 2015, Lucus had a 5.6 percent ownership stake in CSU, according to that release.

“We are pleased to have reached an agreement with Capital Senior Living Corp.,” says Tanger. “We support management’s commitment to operational excellence, and are confident that the new independent board member will be a strong addition to the board who will support the company in achieving its substantial potential.”

Capital Senior Living Corp. operates 126 seniors housing communities totaling approximately 15,800 units. As of June 1, 2015, the company ranked as the 19th largest owner and ninth largest operator of seniors housing in the U.S., according to the American Seniors Housing Association.

The company’s stock price closed at $17.53 on Monday, March 21, down from $25.92 a year ago.

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