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July 29, 2014 01:00 AM

Kindred makes its case for a full Gentiva takeover

Beth Kutscher
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    One day after Kindred Healthcare abandoned its plan to acquire a 14.9% stake in Gentiva Health Services, the post-acute-care operator is stepping up its efforts to pursue a full takeover of Gentiva at $17.25 a share.

    Kindred, now one of two bidders for Gentiva, stressed in a Tuesday news release that its proposal would create more upside for shareholders than a standalone Gentiva. In addition, it said it could realize more synergies—or $60 million to $80 million in cost savings in the first two years after the deal closing—than “any other strategic bidder.”

    Citigroup also has provided Kindred with a letter indicating that the bank is “highly confident” that it could arrange financing for the transaction, even at $17.25 a share or $635.5 million plus the assumption of Gentiva's debt, Kindred said in a news release. In addition, it has already received antitrust approval from the Federal Trade Commission for the deal, Kindred said.

    Kindred’s Tuesday release would seem an effort to force the other, unnamed bidder out into the open so Gentiva management and shareholders can better decide which suitor might be the better fit.

    The other bidder for the Atlanta-based home health and hospice company is undisclosed but speculated to be a private equity firm.

    Louisville, Ky.-based Kindred failed to receive enough support from shareholders for its tender offer at $16 a share. It is now entering due diligence and negotiations directly with Gentiva for a $17.25 per share bid.

    With the addition of Gentiva, Kindred hopes to offer a wider spectrum of services. The smaller company has a presence in 21 of Kindred's 22 integrated-care markets.

    Kindred on Tuesday also reiterated that it is willing to structure the deal as either an all-cash transaction or with a mixture of cash and stock.

    Follow Beth Kutscher on Twitter: @MHbkutscher

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      • Transformation
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      • Regional News
        • Midwest
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      • Digital Edition (Web Version)
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        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
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      • Hospital Financials
      • Staffing & Compensation
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