Kindred ‘Not Deterred’ by Gentiva Takeover Pushback

Gentiva Health Services, Inc. (NASDAQ: GTIV) adopted a new shareholder rights plan May 23 following the company’s rejection of a proposal by Kindred Healthcare, Inc. (NYSE:KND) to acquire Gentiva for $1.6 billion.

The new rights plan will protect Gentiva shareholders, said Gentiva Executive Chairman Rod Windley in a recent news release, adding that Kindred’s proposal to acquire Gentiva for $14 per share in Kindred stock and cash “undervalues Gentiva [and] is inadequate.”

However, Kindred officials said Tuesday they will “not be deterred” and will continue to pursue the acquisition of the health and hospice provider.

In a letter dated May 27 to Gentiva officials, Kindred CEO Paul Diaz wrote, “We are disappointed, however, that instead of listening to your shareholders – the true owners of Gentiva – and immediately entering into good faith negotiations with Kindred, your board has instead implemented a poison pill that limits shareholders’ opportunity to maximize the value of their investment. We question the motive and timing of such implementation, which limits not just Kindred, but all Gentiva shareholders from increasing their investment in the company.”

The home health industry’s two largest players have publicly shared their differing views of the proposed acquisition since it was announced earlier this month.

Gentiva’s new shareholder rights plan will allow current shareholders to acquire Gentiva’s common stock at a discounted price if a person or group acquires ownership of 15% percent or more of the company’s common stock in an unapproved transaction. The rights are slated to expire May 20, 2015.

Kindred CEO Paul Diaz said, “The combined company’s national footprint would allow it to deliver enhanced coordinated care, helping to transition patients home more quickly and provide more patient-centric, cost-effective treatment,” in a statement released prior to Gentiva’s adoption of the new shareholder rights plan.

Gentiva is the second largest provider of home health care with a 4.76% market share, according to 2013 rankings from Health Market Science, a firm that collects and analyzes healthcare provider data in the U.S.

Written by Cassandra Dowell