Kindred to Gentiva: Don’t Acquire Amedisys

In the latest move of Kindred Healthcare’s ongoing quest to buy Gentiva Health Services, Kindred (NYSE:KND) has sent a letter to the Gentiva (NASDAQ:GTIV) board of directors, telling the company to reconsider its pursuits of acquiring Amedisys Inc. (NASDAQ:AMED).

The acquisition, Kindred writes, would disenfranchise Gentiva shareholders. Instead, Kindred urges the board to discuss its “highly attractive cash offer,” which Kindred upped to $1.7 billion earlier in June. If Gentiva moves forward with the acquisition, however, Kindred says it would review the outstanding $14.50 cash offer and “consider revising or withdrawing it.” 

“We believe it is incumbent on the Gentiva board, in fulfilling its fiduciary duty to its shareholders, to sit down with Kindred immediately and explore our value-enhancing proposal before entering into any agreement that could impair the value of, or preclude, a Kindred-Gentiva combination,” according to the letter, signed by Kindred CEO Paul J. Diaz. 

This Kindred-Gentiva combination would better position both companies to provide integrated post-acute care at lower costs to a broader range of patients, according to the letter, while a deal between Gentiva and Amedisys would not advance the position or interests of Gentiva or its patients. 

“We believe the combination of Kindred and Gentiva would have minimal execution risk and a high likelihood of swift and seamless integration,” the letter states. 

For the past six weeks, Kindred has been bullish on its proposed takeover of Gentiva, the second largest provider of home health care. The company’s original proposal would have amounted to a $1.6 billion acquisition, but was later revised to an all-cash offering that would total $1.7 billion.

Throughout the process, Gentiva has remained reluctant to discuss the deal and adopted a new shareholder rights plan that would prevent any entity from acquiring more than a 15% stake. 

To read the full letter, click here

Written by Emily Study