Former HTA CEO Scott Peters helped to start a golf course investment firm in the late 1990s
The combining of Nashville, Tenn.-based Healthcare Realty Trust Inc. (NYSE: HR) and Scottsdale, Ariz.-based Healthcare Trust of America Inc. (NYSE: HTA) is now complete, with the formation of a newly formed REIT operating under the Healthcare Realty Trust name and HR ticker symbol. But a July 24 article in the Charleston (S.C.) Post and Courier provides some interesting history concerning the former president and CEO of HTA: Scott Peters.
Mr. Peters, who co-founded and ran the REIT since its launch as Grubb & Ellis Healthcare REIT in 2006, then helped lead HTA through its initial public offering (IPO) in 2012, abruptly resigned from HTA in mid-2021.
The local news article notes that, before helping found the precursor to HTA, Mr. Peters was the chief financial officer (CFO) for Charleston-based Golf Trust of America (GTA) Inc. According to a February 2010 U.S. Securities and Exchange Commission (SEC) filing, GTA was incorporated in November 1996 and tried to capitalize on the “Tiger Woods effect” on the golf industry at the time by pursuing “consolidation opportunities in the ownership of upscale golf courses throughout the United States.” It acquired interests in 47 golf courses from 1997 to 1999, according to the SEC filing.
But with new golf courses glutting the market, rising interest rates, mounting debts and tumbling real estate values, GTA was forced to “make an early beeline for the clubhouse,” according to the Post and Courier.
The SEC filing explains that, after struggling financially and considering a plan to liquidate its assets in 2001, GTA sold 45 of its 47 golf courses, and sold the last two in 2007 and 2009, before merging in 2010 with Pernix Therapeutics, a publicly traded pharmaceutical firm that went bankrupt in 2019 amid allegations of insider trading.
By then, as noted, Mr. Peters had started the earlier version of HTA, where the former CEO of GTA, Bradley Blair II, became a board member. Over the years, HTA accumulated a portfolio of medical office buildings (MOBs) totaling more than 24 million square feet of space.
But when Mr. Peters resigned on July 29, 2021, the move set off “alarm bells among financial analysts,” according to the Post and Courier article. During an Aug. 6, 2021, earnings conference call, Citi’s Michael Bilerman said, “It’s not every day you see someone just walk away from the company they founded and the team they founded… Can you elaborate on his decision to resign? And does it have any result of any of the whistleblower complaints that were made?”
Interim CEO Peter Foss responded, “It is not a result of any whistleblower. It was a personal decision on Scott’s part to resign… We can’t put any more information out at this point in time. I don’t know what else to say. We can’t comment.”
A subsequent investigation found that Mr. Peters had “violated a whistleblower policy; had charged some minor, undisclosed personal expenses to the company; and hadn’t fully reimbursed HTA for his use of the corporate aircraft, according to a filing with stock market regulators.”
Soon after, HTA faced external pressures, including a letter filed last October from Elliott Management Corp., a large shareholder, calling on the board to conduct a strategic review. Elliott stated that HTA was saddled with high-cost debt and that the “status quo” was “untenable.”
According to the article, the hedge fund also said it was confident that “highly credible buyers will present compelling offers” to buy the business at a fat premium.
“Within a few months, HTA struck a cash-and-stock deal to be sold to … Healthcare Realty Trust at a 15 percent markup from the previous trading range, plus a special dividend of nearly $5 per share.”
For more information, please visit PostAndCourier.com. (Subscription required)
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