Ortelius Announces Glass Lewis Recommend Capital Senior Living Shareholders Vote AGAINST Costly, Dilutive and Poorly Structured Conversant Capital Agreement


Highlights A Leading Independent Proxy Consulting Firm Highlights Many Governance, Financial And Process Flaws Associated With Onerous Modified Transactions

Notes Glass Lewis acknowledged that “sufficient capital is probably available from other sources on superior terms”

Reiterates that Ortelius has committed to immediately inject $ 30 million of capital without contingency through a rights offer, while noting that Invictus has committed to immediately inject $ 25 million of capital without contingency as part of the its seemingly superior $ 150 million alternative solution

Urges shareholders to protect their investment from unfair and unnecessary dilution by voting VERSUS operations modified on October 22sd Special meeting

NEW YORK, October 14, 2021– (BUSINESS WIRE) – Ortelius Advisors, LP (together with its affiliates, “Ortelius” or “we”), which owns approximately 12.7% of the outstanding common shares of Capital Senior Living Corporation (NYSE: CSU) ( “Capital Senior Living” or the “Company”), today announced that Glass, Lewis & Co. (“Glass Lewis”) recommends that shareholders of the Company vote VERSUS all management proposals at the next general meeting of shareholders (the “Special Meeting”) on October 22, 2021, including costly, dilutive and poorly structured modified financing transactions (the “Modified Transactions”) with Conversant Capital (and its affiliates, “Conversé”). Please note that voting against the amended transactions will allow the board of directors of Capital Senior Living (the “Board”) to finally seek readily available financing alternatives championed by major shareholders, such as Ortelius and Invictus Global Management LLC ( with its affiliates, “Invictus”). Please visit www.SaveCSU.com for all documents and presentations relating to Ortelius’ advocacy on behalf of other shareholders.

In his report, Glass Lewis notes:1

  • “Overall, given the improved operational performance and current financial condition of CSU […] we are less inclined to believe that shareholder support for such a significant and significantly dilutive change of control financing transaction is justified at the present time. “

  • “We take an even darker view of the proposed transaction when we consider the litany of unfavorable conditions for existing CSU shareholders, the incentives provided to the management of Conversant, Silk, Arbiter and CSU, and the language and tactics used by the board of directors in an apparent attempt to coerce shareholders into agreeing what we see as a bad deal objectively for existing investors. “

  • “[…] we note that the proposed transaction has been approved by a board and a transaction committee composed mainly of directors who have been with the company for at least five years, a period during which the Company’s investors suffered significant destruction of value. “

  • “[…] we are reluctant to show deference to directors when it comes to assessing the financial condition of the Company, its review of potential value enhancement / preservation alternatives, or the assessment and recommendation of such an important and transformative financing transaction which effectively amounts to a change of control of the Company at a takeover price. “

  • “[…] rather than appealing to the Company’s major shareholders simply on the merits of the amended terms of the agreement, it appears that the support and participation of Silk and Arbiter was effectively bought by the allocation of unnecessary costs and undue representation on the CSU board of directors, in our vision. “

  • “All in all, weighing the foregoing considerations and the salient points raised by each of the CSU and Ortelius Board members in their respective documents […] and our belief that sufficient capital is probably available from other sources on superior terms, we believe CSU shareholders are best served by voting to reject the proposed transaction. “

  • “According to U.S, voting against the transaction with Conversant is unlikely to send the Company down the path to insolvency, but will instead express shareholder dissatisfaction with an unfavorable financing transaction and express the wish that the board of directors secure the capital the Company needs on less dilutive and less flagrant conditions. “

Peter DeSorcy, Managing Member of Ortelius, commented:

“We are very pleased that Glass Lewis is recommending that shareholders of Capital Senior Living vote against expensive, dilutive and ill-structured modified transactions, which would unnecessarily seize significant value from the vast majority of existing shareholders and give de facto control of the company. to Conversant and Silk Partners following a privately negotiated agreement. The report released by Glass Lewis echoes many of our concerns about the board’s failure to effectively assess the company’s financing needs and subsequently execute a viable process to seek the right amount of capital to Reasonable and Fair Terms It is also encouraging that Glass Lewis brought to light the improper manner in which Conversant and the management of the company intersected the amended transactions and effectively bought the backing of Silk Partners and Arbiter Partners, to the detriment of the other shareholders . , we hope that the shareholders we defend take note of the fact that Glass Lewis recognizes that alternative capital is available from other sources – now – on better terms.

As a reminder, Ortelius and other shareholders, such as Invictus, have publicly committed to rapidly providing affordable, contingent and potentially non-dilutive capital to meet the Company’s liquidity needs. If taken together, the Ortelius and Invictus proposals would provide an immediate injection of $ 55 million, and Invictus’ terms include a subsequent $ 75 million in the form of a secured rights offer for a convertible instrument that could mitigate dilution for participants and minimize leverage over time. In our opinion, the public commitments of Ortelius and Invictus represent the highest possible level of certainty as investors do not have the capacity to negotiate with the Company until the Amended Transactions have been voted on. “

About Ortelius Advisors, LP

Ortelius is a research-intensive, fundamentals-driven, activist-driven alternative investment management firm focused on event opportunities. Founded in 2015 by Peter DeSorcy and HRH Prince Pavlos, the asset manager is based in New York.

1 Permission to quote neither requested nor received. Emphasis added by Ortelius.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20211014006121/en/



Okapi Partners
Mark Harnett, 646-556-9350


Greg Marose / Charlotte Kiaie, 646-386-0091
gmarose@mkacomms.com / ckiaie@mkacomms.com

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