Gentiva to Negotiate on Offers From Kindred, Unnamed Bidder

Jul 24, 2014 5:38 pm ET

July 24 (Bloomberg) -- Gentiva Health Services Inc., a home-care and hospice company, said it will consider two acquisition proposals, including one from long-term medical care provider Kindred Healthcare Inc.

Kindred made an offer of $17.25 a share on July 21 that was conditional on Gentiva engaging in talks. Kindred’s offer matched the amount proposed by an unnamed bidder that Gentiva announced on July 17. Based on Atlanta-based Gentiva’s 36.8 million outstanding shares, the value of the deal would be $634.8 million.

“The board will carefully review the two proposals and any other proposals it might receive,” Gentiva said today in a statement. “The board believes that it is in the stockholders’ best interest to allow both parties access to due diligence to encourage them to increase the value of their proposals to levels that will deliver full value to Gentiva stockholders.”

Formation Capital LLC, a closely held private-equity firm that specializes in senior housing, is the mystery bidder, Bloomberg First Word reported on July 18, citing a person familiar with the matter.

Louisville, Kentucky-based Kindred had offered on July 14 to buy a 14.9 percent stake in Gentiva for $16 a share after the company rejected two takeover bids. That’s the most Kindred can buy without triggering a “poison pill” takeover defense by Gentiva. Kindred must terminate its partial tender offer to receive access to due diligence, Gentiva said in the statement.

Gentiva shares declined less than 1 percent to close at $18.18 in New York. The company has gained 64 percent in the past 12 months.

Nick Lamplough, a spokesman for Kindred at Joele Frank, Wilkinson Brimmer Katcher, declined to comment by telephone. Calls to Alpharetta, Georgia-based Formation Capital and to CEO Brian Beckwith weren’t immediately returned.

--With assistance from Marie French in New York.