Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Proxy Contest (October 2021)
19 slides from Sonida Senior Living's proxy contest presentation, Oct 5, 2021
Slide 1: Presentation prepared by Ortelius Advisors L.P., October 2021
PRESENTATION PREPARED BY ORTELIUS ADVISORS L.P. OCTOBER 2021
Slide 2: Disclaimer
The materials contained herein (the represent the opinions of Ortelius Advisors, L.P. and certain of its affiliates (collectively, or and are based on publicly available information with respect to Capital Senior Living Corporation Senior or the . Ortelius Advisors recognizes that there may be confi
Slide 3: Urge stockholders to reject the Amended Transactions on GOLD PROXY CARD
Financial Officer and without engaging a broad cross-section of current stockholders Despite improving business fundamentals and modest near-term maturities, the Board agreed to that would effectively give away control to Conversant Capital and handsomely reward existing management On Friday, Octobe
Slide 4: Key facts surrounding the Amended Transactions
We want to ensure stockholders are armed with key facts surrounding the Amended Transactions, which would: x Sell CSU stock at $25/share via the PIPE, compared to the original $40/share Series A Conversion Price x Sell CSU stock at $30/share via the backstop commitment, compared to the original $40/
Slide 5: Board re-cut a new deal selling more of the Company at lower prices
The Board struck a bad deal on July 22nd sending the stock price plummeting, then re-cut a new deal on October 1st that sells even more of the Company to Conversant at even lower prices Amended Transactions Original Transactions Summary Amount raised ($mm) Exercise price per share New shares (mm) Am
Slide 6: Conversant ends up with even more of the Company
Conversant ends up with even more of the Company under the Amended Transactions Amended Transactions Original Transactions x The Series A Preferred Stock, Common Stock x The Series A Preferred Stock to be sold to and Warrants to be sold to Conversant will Conversant will be initially convertible int
Slide 7: We Urge Stockholders to Focus on the Facts
We Urge Stockholders to Focus on the Facts The Company has less than $50 million of debt coming due in the next 6 months The debt maturities are overcollateralized by the value of its substantial real estate holdings The vast majority of the near-term debt is non-recourse to the parent company The C
Slide 8: Modest near-term maturities and substantial real estate value backing debt
Although the Board claims CSU faces financial ruin without the Amended Transactions, the Company has modest near-term maturities and substantial real estate value backing its debt Debt Maturity Schedule as of 8/12/20211 $296.9M $283.5M Net Book Value Bridge Loans 3 Promissory Note Non-Recourse Mortg
Slide 9: Company touts debt maturities while failing to mention BBVA loan extension
The Company touts its impending debt maturities in an apparent scare tactic, while failing to mention it successfully extended the $40.5 million bridge loan with BBVA, which has significantly lowered its capital needs August 12, 2021 The Company issues a press release stating, one year million loan
Slide 10: More affordable alternatives available if stockholders vote down transactions
If stockholders vote down the proposed transactions, we are confident CSU will be able to readily access more affordable alternatives to sufficiently address near-term capital needs We believe CSU could raise up to $70 million We believe CSU could raise up to $70 million or through an equity rights
Slide 11: Management, Conversant, Silk and Arbiter stand to benefit at stockholders' expense
MANAGEMENT, CONVERSANT, SILK AND ARBITER STAND TO BENEFIT AT THE EXPENSE OF EXISTING STOCKHOLDERS
Slide 12: Pattern of Conversant paying off obstacles to gain control
There appears to be a consistent and growing pattern whereby Conversant pays off those who stand as obstacles to gain control of the Company at a take-under price Management not only receives a cash retention bonus, but stock options that are immunized from the vast equity dilution and restruck to p
Slide 13: Management stock grants and cash retention pool
Ortelius finds it appalling that the Board wants to grant certain senior management a sizable amount of stock without subjecting these individuals to the same dilution as current stockholders 797,699 $4.2M Shares Cash The Board has proposed increasing the number of shares of We consider it outrageou
Slide 14: Majority control of the Board will be sold to Silk and Conversant
Majority control of the Board will be sold to Silk and Conversant SEPTEMBER 13, 2021 OCTOBER 1, 2021 4 Board seats, for a combined 6 out of pro forma 9 o Conversant and Silk will now gain even more Board seats on a combined basis The Reporting Persons believe that an o Conversant would have received
Slide 15: Arbiter will receive 1% of the Company for a backstop with no value add
Arbiter will receive 1% of the Company in exchange for a backstop with no value add Arbiter has committed to purchasing at least $5 million of common stock in the rights offering, which is an amount LESS THAN its pro rata share o Its pro rata share would actually be a commitment of $9.9 million: 299
Slide 16: The Amended Transactions just further dilute CSU stockholders
The reality is that the Amended Transactions just further dilute CSU stockholders x The Board has validated assertion that convertible preferred issuance operates as a loan-to-own cram-down of existing stockholders x Ortelius has always maintained the position that convertible preferred stock is gro
Slide 17: Conversant will receive 6% of shares as a break-up fee
Conversant will now receive 6% of shares of CSU as of today as a break-up fee if the deal does not close The Board gave away its rights to entertain far better financial alternatives when it agreed to the Original Transactions, which did not include the standard go shop period or disclose any break-
Slide 18: Can stockholders trust this Board to act in their best interest?
How can stockholders trust that this Board is acting in their best interest after reviewing the egregious terms of the Amended Transactions? ? How can the Board neglect to negotiate for a go- shop period when it is aware of multiple financing alternatives that have been put forth publicly by Orteliu
Slide 19: Vote AGAINST the Amended Transactions on our GOLD PROXY CARD
We urge you to vote AGAINST the Amended Transactions on our GOLD PROXY CARD to protect the value of your investment and position the Board to assess more attractive financing options Visit www.SaveCSU.com for more information 19