LOUISVILLE, Ky.–(BUSINESS WIRE )– Jul. 14, 2014 — Kindred Healthcare Inc. (NYSE:KND) has amended its previously announced all-cash tender offer to acquire all outstanding shares of common stock of Gentiva Health Services Inc. (“Gentiva”) (NASDAQ:GTIV), with the associated preferred share purchase rights, it announced today.
Under the amended offer, Kindred will seek to purchase 14.9 percent of Gentiva’s outstanding shares at an increased offer price of $16.00 per share in cash. The amended offer is conditioned upon, among other things, a minimum of 5,489,914 shares being tendered in the offer and not withdrawn (which represent, together with shares already owned by Kindred, 14.9 percent of Gentiva’s outstanding shares) and clearance of the proposed transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
In light of the Gentiva board of directors’ implementation of a poison pill (also known as a “shareholder rights plan”) the 14.9 percent ownership stake sought by Kindred represents the maximum amount of shares outstanding that can be accepted in the amended offer. If the offer is oversubscribed, Kindred will purchase the tendered shares on a pro rata basis. The amended offer will expire at 5 p.m., New York City time on July 28, 2014, unless further extended.
“Our enhanced $16.00 per share all-cash offer underscores our confidence in the merits of uniting our two highly complementary companies,” Kindred CEO Paul J. Diaz said. “We have also indicated our willingness to structure the transaction so that Gentiva shareholders can receive a mix of cash and stock — allowing them to participate in the combined company’s substantial upside — but this would only be possible through a negotiated transaction.
“While we continue to believe that Kindred could unlock significant value through this transaction, we will not consider further increasing our offer unless the Gentiva board and management team engage with Kindred and demonstrate additional value in the due diligence process.”
Prior to the launch of Kindred’s proposal, Gentiva common stock had not closed above $16.00 per share since July 29, 2011. Kindred’s enhanced offer for Gentiva represents a:
• 87 percent premium to Gentiva’s closing share price on May 14, 2014, the day prior to Kindred making public its proposal to acquire Gentiva;
• 58 percent premium over Gentiva’s two-year volume-weighted average closing price on May 14, 2014; and
• 60 percent premium to Wall Street analysts’ unaffected one-year median price target of $10.00 per share.
“Since announcing our proposal to acquire Gentiva on May 15, 2014, we have been clear on the benefits that this combination would bring to both companies’ shareholders, employees and patients,” Diaz said. “It is important to note, however, that Kindred has a robust pipeline of external growth opportunities and organic initiatives that we are pursuing in parallel with the Gentiva offer. If the 14.9 percent minimum tender condition is not met, we will withdraw our offer, and if the Gentiva board remains unwilling to commence discussions, we will turn our attention toward these other avenues for value creation.”
Kindred noted that its original tender offer to acquire all of the outstanding shares of Gentiva for $14.50 per share in cash, commenced on June 17, 2014, was scheduled to expire at 5 p.m. July 16, 2014. As of 5 p.m. July 11, 2014, approximately 341 shares of Gentiva common stock were validly tendered into and not withdrawn from the tender offer.
Citigroup is acting as financial advisor to Kindred. Cleary Gottlieb Steen & Hamilton LLP is acting as legal advisor and Gibson, Dunn & Crutcher LLP is serving as special counsel to Kindred.