Kindred offered $17.25 a share, the company said in a letter today to Gentiva’s board, matching the amount proposed by an unnamed bidder that Gentiva announced on July 17. Based on Gentiva’s 36.8 million outstanding shares, the value of the deal would be $634.8 million.
“We have been clear that we are willing to consider further increasing our offer if you engage in good faith and permit us to conduct due diligence,” Kindred Chief Executive Officer Paul Diaz wrote in the letter, adding that the offer was contingent on Gentiva engaging in talks.
Formation Capital LLC, a closely held private equity firm that specializes in senior housing, is the mystery bidder, Bloomberg First Word reported, citing a person familiar with the matter.
“We have indicated our willingness to structure a transaction so that Gentiva shareholders can receive all cash or a mix of cash and stock, which would allow them to participate in the combined company’s substantial upside potential,” Diaz wrote in the letter to Gentiva.
Gentiva shares rose less than 1 percent to $18 in extended trading at 5:32 p.m. New York time after closing at $17.95. The company has gained 72 percent in the past 12 months.
Louisville, Kentucky-based Kindred offered on July 14 to buy a 14.9 percent stake in Gentiva for $16 a share after the company rejected two takeover bids, a change in strategy to try and force the company to enter talks. That’s the most Kindred can buy without triggering a “poison pill” takeover defense by Atlanta-based Gentiva.
Gentiva turned down a June offer from Kindred of $14.50 a share for the company, valued at $573 million, and an offer of $14 a share, or about $533 million, announced May 15.
Gentiva has received Kindred’s latest offer and the board “in consultation with its financial and legal advisers, will review the proposal carefully in due course,” the company said in a statement.
Nick Lamplough, a spokesman for Kindred, declined to comment on the increased offer.
Calls to Formation Capital and to CEO Brian Beckwith weren’t immediately returned.
To contact the editors responsible for this story: Reg Gale at email@example.com Andrew Pollack, Ben Livesey