Five Star Quality Care, Inc. Grants Certain Ownership Limitation Exemptions to ABP Acquisition LLC

NEWTON, Mass.–(BUSINESS WIRE)–On October 1, 2016, the Board of Directors of Five Star Quality Care,
Inc. (Nasdaq:FVE), acting by a special committee, granted ABP
Acquisition LLC a conditional exemption from certain Five Star bylaw and
charter restrictions applicable to certain ownership limitations of not
more than 5% and 9.8% of Five Star’s shares of common stock,
respectively. Five Star understands that ABP Acquisition LLC intends to
make a tender offer for up to 10,000,000 shares at $3.00 per share. ABP
Acquisition LLC is affiliated with Mr. Barry Portnoy, a Managing
Director of Five Star, and with the controlling shareholders of The RMR
Group Inc. (Nasdaq: RMR) and its subsidiary The RMR Group LLC, Five
Star’s business manager.

A Special Committee of Five Star’s Board of Directors composed of all of
Five Star’s Independent Directors negotiated and approved a Consent,
Standstill, Registration Rights and Lock-Up Agreement with ABP
Acquisition LLC, pursuant to which the Five Star shares ABP Acquisition
LLC may acquire in the tender offer will be subject to standstill and
lockup restrictions for extended periods. The Board acting by this
Special Committee intends to express no opinion to the Company’s
shareholders with respect to the tender offer as it believes the
decision as to whether to tender Five Star shares is a personal decision
which should be made by shareholders based upon their personal
circumstances. Five Star’s Board suggests that each shareholder should
review the tender offer and all related information, when available,
consult with such holder’s financial and tax advisors and make an
independent determination.

Five Star Quality Care, Inc. is a senior living and healthcare services
company. As of June 30, 2016, Five Star operated 276 senior living
communities (excluding one senior living community classified as a
discontinued operation) with 31,191 living units located in 32 states,
including 214 communities (22,952 living units) that it owned or leased
and 62 communities (8,239 living units) that it managed. These
communities include independent living, assisted living, continuing care
retirement communities and skilled nursing communities. Five Star is
headquartered in Newton, Massachusetts.

IMPORTANT NOTICE

This press release does not constitute an offer to sell or purchase, or
the solicitation of tenders with respect to Five Star’s shares. ABP
Acquisition LLC has not yet commenced the tender offer described herein.
If ABP Acquisition LLC commences a tender offer for shares of Five Star
common stock, it will file with the Securities and Exchange Commission a
tender offer statement on Schedule TO and Five Star will file a
solicitation/recommendation statement on Schedule 14D-9. Shareholders of
Five Star are encouraged to read each of the tender offer statement of
ABP Acquisition LLC and Five Star’s solicitation/recommendation
statement on Schedule 14D-9 when each becomes available because they
will contain important information about the tender offer. Shareholders
may obtain the tender offer statement and the
solicitation/recommendation statement and other filed documents at no
charge by requesting them when they are available on the Securities and
Exchange Commission’s website (www.sec.gov)
and at no charge from Five Star or ABP Acquisition LLC. Five Star
shareholders are urged to read these materials, if and when they become
available, carefully before making any decision with respect to the
tender offer.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER FIVE STAR
USES WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE”, “MAY” OR SIMILAR EXPRESSIONS, FIVE STAR IS MAKING FORWARD
LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON FIVE
STAR’S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING
STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY FIVE STAR’S
FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
THE FIVE STAR BOARD UNDERSTANDS THAT ABP ACQUISITION LLC INTENDS TO MAKE
A TENDER OFFER FOR 10,000,000 SHARES AT $3.00 PER SHARE. IN FACT THE
NUMBER OF SHARES AND THE PRICE PER SHARE THAT IS OFFERED IS AT THE
DISCRETION OF ABP ACQUISITION LLC AND MAY CHANGE AND ABP ACQUISITION LLC
MAY NOT COMMENCE THE TENDER OFFER.

THE INFORMATION CONTAINED IN FIVE STAR’S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER “RISK FACTORS” IN FIVE
STAR’S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE FIVE STAR’S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE STATED IN OR IMPLIED BY FIVE STAR’S FORWARD
LOOKING STATEMENTS. FIVE STAR’S FILINGS WITH THE SEC ARE AVAILABLE ON
THE SEC’S WEBSITE AT WWW.SEC.GOV.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, FIVE STAR DOES NOT INTEND TO UPDATE OR CHANGE
ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

Contacts

Five Star Quality Care, Inc.
Brad Shepherd, (617) 796-8245
Director,
Investor Relations