Herrick Represents Investment Management Firm in Successful Proxy Campaign to Block Merger Between Two REITs

September 5, 2023 – Press Release
Herrick, Feinstein LLP

Following a months-long public proxy campaign by Herrick client, Flat Footed LLC (“Flat Footed”), opposing the proposed merger between Diversified Healthcare Trust (“DHC”) and Office Properties Income Trust (“OPI”), the two companies have recently announced their termination of the merger agreement.

Flat Footed is a top shareholder in DHC, a REIT owning senior housing properties and medical office buildings. In April 2023, DHC and OPI – a REIT owning commercial office buildings – announced a proposed merger. Both REITs are managed by the same external company, The RMR Group LLC. In May 2023, Flat Footed was the first DHC shareholder to publicly oppose the deal, and it formally launched a proxy campaign in opposition in June 2023. Soon after, two other DHC shareholders – D.E. Shaw and H/2 Capital Partners – joined Flat Footed’s public opposition to the proposed merger. Thereafter, three leading proxy advisor firms, Institutional Shareholder Services Inc., Glass, Lewis & Co., and Egan-Jones Ratings Company, issued reports in the past month recommending DHC shareholders vote against the proposed merger. Flat Footed’s opposition campaign proved successful after the markets closed on September 1, 2023, when DHC and OPI announced their joint termination of the merger agreement.

Herrick partner and Restructuring & Finance Litigation co-chair Sean E. O'Donnell and partner Christopher W. Carty were lead counsel on the matter for Flat Footed LLC along with associate Nicholas G. Veliky. Herrick was joined by Longacre Square Partners, Olshan Frome Wolosky LLP, and Okapi Partners LLC in its representation of Flat Footed.

Herrick congratulates Flat Footed and fellow DHC shareholders on this successful endeavor.