Kindred Healthcare on Tuesday reiterated its determination to acquire Gentiva Health Services despite the smaller company last week adopting a poison pill to block its unwanted takeover attempt.
Gentiva's shareholder rights plan, implemented Friday, prevents any entity from acquiring more than 15% of the Atlanta-based company without approval.
In its Tuesday letter to Gentiva, Executive Chairman Rodney Windley and CEO and President Tony Strange, Kindred said analysts and shareholders from both companies support the $14 per share offer. The bid represents a 64% premium to Gentiva's share price on the day before the deal was announced, and is 40% above analysts' one-year median price target, the letter said.
“Gentiva has been steadfastly unwilling to begin a dialogue with Kindred, and we believe the implementation of a poison pill further demonstrates that Gentiva is ignoring the will of its shareholders,” Kindred CEO Paul Diaz wrote. “Despite Gentiva's actions, we will not be deterred.”
Kindred's letter did not raise the $1.6 billion offer price, but analysts believe the Louisville, Ky.-based post-acute-care operator has room to negotiate. While the current proposal envisions a 50/50 split between cash and stock, Kindred already said it would also be willing to complete an all-cash deal.
If Gentiva's management team refuses to budge, shareholder pressure could play a key role in keeping the deal alive. There is no deadline for Gentiva to accept the offer, but Kindred is hoping to complete the deal by year-end.
Follow Beth Kutscher on Twitter: @MHbkutscher
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