SUNH To Split Into Two, An Operating Company And A REIT

Analysts at Oppenheimer & Co reiterate their "outperform" rating on Sun Healthcare Group Inc SUNH. The target price for SUNH is set to $14. Sun Healthcare is splitting its company into two parts, an operating company and a REIT, to release value for shareholders. SUNH has also planned to issue common stock prior to the transaction. According to Oppenheimer, “In terms of managerial changes, Richard Matros will act as CEO of the REIT, and Harold Andrews, a finance professional with extensive real estate experience, will be its CFO. Current COO and SunBridge President William Mathies will become CEO of the Operating Company.” The analysts say, “Furthermore, in connection with the separation, SUNH's board of directors has also adopted a Stockholder Rights Plan to establish an ownership limitation and preserve potential tax benefits for REIT stockholders.” While the management said that “it chose this option after considering a number of other strategies.” The company seems to be frustrated with the current valuation of the shares and is looking to unlock value through this transaction. More Analyst Ratings here