UPDATE: HCP Ordered To Pay Ventas $101 Million; Plans To Appeal

A jury ordered real-estate investment trust HCP Inc. (HCP) to pay Ventas Inc. (VTR) about $101 million in compensatory damages in a verdict that the company interfered with Ventas' initial attempt to acquire Sunrise Senior Living REIT.

Chicago-based Ventas had originally sought $300 million in compensatory damages as well as punitive damages, according to HCP.

Most analysts had been expecting Ventas to win the suit but the amount of damages HCP would have to pay remained an outstanding question. Oppenheimer & Co. analyst Mark Biffert said Ventas may have been surprised with the amount of compensatory damages awarded.

"I think Ventas was expecting a much larger number," said Biffert.

In a statement, Ventas said it was pleased with the jury's recognition of HCP's "significantly wrongful actions."

"The damages awarded by the jury, at least in part, will help compensate Ventas for the injury caused by HCP," said Ventas Chairman, President and Chief Executive Debra Cafaro.

Still, Biffert said the impact on both HCP and Ventas is minimal, due to the size of the companies. HCP has an approximate market capitalization of roughly $7.1 billion and Ventas' market capitalization is about $5.6 billion.

Ventas, a REIT that owns acute-care hospitals and personal-care facilities, in July said a U.S. District Court in Kentucky ruled that it could present its case against HCP in a trial that commenced in August. At the time, the court denied a summary judgment motion by HCP, which requested the court toss Ventas' claim.

Ventas and Sunrise agreed to an amended merger in April 2007 for $1.97 billion, which included a 10% price increase from an earlier agreement in January of that year. Ventas entered the Canadian senior housing market with the acquisition.

Ventas filed a complaint in 2007 alleging that HCP interfered with its purchase agreement by making misleading statements related to the bid and alleged HCP's interference in the deal caused it to pay more money for the real investment trust. HCP said it plans to appeal the verdict. A representative from HCP declined to provide additional comments.

HCP's shares were down 0.7% to $26.44 in recent trading, while Ventas' stock rose 0.6% to $36.82.

-Veronica Dagher, 212-416-2261; [e-mail]

(John Kell contributed to this report)