Kindred Healthcare late Monday said it will drop efforts to purchase a 14.9% stake in Gentiva and will instead enter due diligence to submit a potential offer for the entire company that would be valued at $17.25 per share.
Shareholders of Gentiva Health Services did not provide enough support for Kindred's $16 per share offer for 14.9% of Gentiva, Kindred said. That stake was the largest it could buy under a poison pill defense Gentiva had put in place to fend off Kindred's initial advances.
Kindred had brought its takeover proposal to investors in June after being rebuffed by Gentiva's board. When the initial $14.50 per share bid failed to attract enough support, Kindred raised the offer price to $16.
But then Gentiva dropped a bombshell: It had another suitor in the wings with a $17.25 per share offer. It described the mystery bidder only as “recognized owner, operator and investor.”
Kindred said it too would offer that higher price, but asked to do due diligence, essentially looking at Gentiva's financials, first. Gentiva said it would open its books to both parties, provided Kindred drops its hostile takeover attempt.
With its tender offer over, Kindred said it would sign confidentiality and standstill agreements and return any tendered shares.
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