Five Star Senior Living Inc. Stockholders Approve Issuance of Stock to Senior Housing Properties Trust and Its Shareholders Effective January 1, 2020

Five Star Senior Living Inc. (Nasdaq: FVE) today announced the results of its 2019 Annual Meeting of Stockholders held yesterday where, among other things, 83.9% of the shares voted were in favor of issuing Five Star common stock to Senior Housing Properties Trust (Nasdaq: SNH) and SNH’s shareholders, in satisfaction of the condition to restructuring Five Star’s business arrangements with SNH, as previously announced. Additional results from the annual meeting are outlined below in this news release.

Katherine Potter, Five Star’s President and Chief Executive Officer made the following statement:

“With yesterday’s vote, we reached an important milestone in completing our transaction with SNH and, when taken in combination with the new $65 million credit facility announced today, we believe these actions further solidify Five Star’s long-term financial outlook.”

“Our plan to complete a one-for-10 reverse stock split is designed to bring Five Star into compliance with Nasdaq listing standards, while allowing Five Star to target a broader group of investors, reduce trading costs for investors and lower administrative costs for the company.”

As previously announced, pursuant to the transaction agreement regarding the restructuring of Five Star’s business arrangements with SNH, effective January 1, 2020, the existing five master leases of 184 senior living communities (19,979 living units) that are leased to Five Star from SNH as well as the existing management agreements and pooling agreements with SNH affecting 77 communities (10,135 living units) will be terminated and replaced with new management agreements for all 261 senior living communities owned by SNH and operated by Five Star. Simultaneous with the conversion, Five Star will issue common stock to SNH and SNH’s shareholders such that their ownership of Five Star will be equal to approximately 34% and 51%, respectively, post issuance. At the same time, SNH will reduce Five Star’s indebtedness, if any, under the $25 million short term credit facility provided by SNH to Five Star in connection with the restructuring transaction, will assume certain of Five Star’s liabilities associated with the converted communities, or make a cash payment to Five Star, all of which, in aggregate, will total $75 million. There are currently no amounts outstanding under the SNH credit facility.