After Gentiva Health Services (NASDAQ: GTIV) initially declined a takeover bid from Kindred Healthcare (NYSE: KND) in a $1.6 billion deal, Kindred has increased its offer to acquire all outstanding shares of Gentiva’s common stock for $14.50 per share, making the proposal a $1.7 billion acquisition.
The new bid — which is an all-cash offer that ups the ante from $14 per share — has a total equity value of about $573 million.
If Gentiva doesn’t agree to the offer, Kindred, the largest post-acute care health services provider in the U.S., says it intends to amend the offer to purchase 14.9% of Gentiva’s outstanding shares, becoming the home health and hospice provider’s largest shareholder. This move would overcome Gentiva’s recent implementation of a shareholder rights plan (also known as a poison pill), which prevents any entity from acquiring more than a 15% stake. In a regulatory filing, Kindred says it expects it would pay about $80 million for the 14.9% stake, The Wall Street Journal reports.
Despite a sweetened proposal, Gentiva remains reluctant and has urged its shareholders not to take action in response to Kindred’s offer, saying that Gentiva’s Board of Directors will review all aspects of the proposed offer with its advisors and make a decision within 10 business days of the offer.
To help fund the possible acquisition and pay down some of its own debt, Kindred launched a public offering of 9 million shares on Monday.
Written by Emily Study