Kindred Healthcare, a post-acute care services provider based in Louisville, Ky., has made an unsolicited proposal to acquire Atlanta-based home health and hospice services provider Gentiva Health Services in a transaction that would be valued at $1.6 billion.
Gentiva has rejected the offer, which would involve Kindred acquiring all of the outstanding shares of common stock of Gentiva for a combination of $7.00 per share cash and $7.00 of Kindred common stock. The post-acute care company has also indicated it will change its offer to 100-percent cash if Gentiva's board prefers, according to a news release. The proposed price for Gentiva implies a total equity value of approximately $533 million.
If Kindred takes over Gentiva, the company will serve nearly 127,000 patients per day and operate in 47 states. "This compelling combination would unite two highly complementary businesses by joining Kindred's resources with Gentiva's home health and hospice capabilities," Kindred CEO Paul J. Diaz said in the release. "Together we would create a unique platform to 'Continue the Care' by delivering patient-centered care across the full spectrum — from hospital to outpatient facility to the patient’s home."
However, according to the text of a letter from Gentiva Executive Chairman Rodney D. Windley and Lead Director Victor F. Ganzi included in Kindred's release, Gentiva rejected the offer. "Having considered your revised proposal, our Board continues to believe that our long-term strategy as a stand-alone company will generate substantially more value to our shareholders," Mr. Windley and Mr. Ganzi wrote. "Accordingly, at this time, we are not interested in pursuing the transaction you are proposing."
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