July 24 (Reuters) - Two shareholders of Sabra Health Care REIT Inc on Monday opposed the company's proposed acquisition of Care Capital Properties Inc, calling the deal too costly.
Hudson Bay Capital Management LP, a New York-based hedge fund that owns about 3.4 percent of Sabra, called on shareholders of the healthcare-focused real estate investment trust to reject the merger at a shareholder meeting next month.
Sabra was overpaying for Care Capital's assets by up to 30 percent, the hedge fund said in a presentation.
A second activist investor, hedge fund Eminence Capital LP, which owns about 3.9 percent of Sabra, also said on Monday it was against the deal.
Eminence Capital said in a letter that Sabra's deal would reverse the company's efforts to reduce exposure to skilled nursing facilities.
Sabra owns real estate properties that serve the healthcare industry in the United States and Canada. Care Capital has a portfolio of healthcare properties focusing on the post-acute care sector.
Sabra, which has a market valuation of about $1.6 billion, said in May it would buy Care Capital in an all-stock deal that would value the combined company at about $4.3 billion.
Sabra had said it would benefit from lower costs of capital by merging with Care Capital and that the deal would add to its earnings immediately.
Hudson Bay said the deal would not reduce Sabra's cost of capital but increase it. The deal would also increase Sabra Chief Executive Rick Matros's compensation by at least 37 percent, the hedge fund added.
Shares of Sabra have fallen 12.1 percent since the May 7 merger announcement, while Care Capital's stock has slipped 4.4 percent.
Hudson Bay also said Sabra's shares could trade over $28 in absence of the deal. The stock closed at $23.45 on Friday.
Sabra did not immediately respond to a request for comment. (Reporting by Sruthi Shankar in Bengaluru and Michael Flaherty in New York; Editing by Sai Sachin Ravikumar)