Long-term-care provider Genesis HealthCare Corp., Kennett Square, Pa., said it
has restructured its previously announced merger with affiliates of Formation
Capital, Alpharetta, Ga., and JER Partners, McLean, Va., in a deal that would
raise the per-share price for shareholders and assume more debt for the
While the total value of the transaction is still about $1.7 billion, Genesis
will assume $475 million in debt, rather than the $450 million it originally announced on Jan. 16. If shareholders approve the agreement at a meeting on May
4, they would receive $64.25 per share, about 2% more than the original
per-share price of $63.
GHCs board of directors believes Formation/JERs increased price represents
excellent value and is far superior on a present-value basis to what the company
could be expected to achieve on a stand-alone basis, George Hager Jr., chairman
and chief executive officer of Genesis, said in a news release. Accordingly, both
the special committee and the full board of directors unanimously recommend that
Genesis shareholders vote to approve the amended proposal.
In the same news release, representatives for Genesis and JER said $64.25 was their best and final price. The amended merger agreement also decreased the
termination fee to $15 million from $50 million.
If shareholders do not approve the deal, Formation and JER would be entitled to
receive up to $7.5 million in expense reimbursement. Genesis has more than 200
skilled-nursing centers and assisted-living residences in 13 Eastern states; the
company also supplies contract rehabilitation therapy to more than 600
healthcare providers in 20 states and the District of Columbia. -- by href="mailto:[email protected]">Jessica Zigmond
href="mailto:[email protected]">Jessica Zigmond