Major home health care provider Gentiva Health Services, Inc. (NYSE:GTIV) rejected the latest offer from home health giant Kindred Healthcare Inc. (NYSE: KND) Thursday, but a third party may be entering the bidding ring — and is upping the anty.
Gentiva rejected Kindred’s offer to acquire 14.9% of the outstanding shares of Gentiva for a price of $16 per share in cash, and is reviewing a new third-party offer to acquire all of the outstanding shares of Gentiva common stock for $17.25 per share in cash.
The $16 per share offer from Kindred was a $2 increase from its previous proposal.
“The [third-party] proposal is based on publicly available information and is subject to financing and due diligence, as well as final internal approvals and the execution of a definitive transaction agreement,” Gentiva said in a news release. “The Board will review the alternative proposal carefully, in consultation with its financial and legal advisors, in due course. The Alternative Proposal was accompanied by support letters from major financial institutions, subject to customary conditions.”
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. Kindred currently ranks No. 6 on the same list, with market share of 1.03%.
Regarding the rejection of Kindred’s proposal, Rod Windley, executive chairman of Gentiva, said, “The board concluded based on thorough analysis that it still leaves a significant gap between the true value of Gentiva and the consideration being offered and is not in the best interests of Gentiva stockholders.
“The stake Kindred hopes to acquire would only be used as an irritant designed to distract Gentiva from executing on its value-creating strategic plan or a potential impediment to any alternative transactions that the Board may believe to be in the best interests of Gentiva stockholders.”
Barclays and Edge Healthcare Partners are serving as financial advisors to Gentiva and Greenberg Traurig, LLP is serving as legal advisor.
Written by Cassandra Dowell