Kindred raises per-share offer for Gentiva but aims for a stake in the company
Kindred Healthcare is offering more cash for shares of Gentiva Health Services Inc., but it now aims to acquire just a slice of the home health and hospice care provider instead of the whole company.
Kindred said Monday that it will pay $16 per share in cash to buy up to a 14.9 percent stake in Gentiva. That total would make Kindred Gentiva's largest shareholder but would fall short of the 15 percent limit imposed by a shareholder rights plan, or "poison pill" measure, that Gentiva's board adopted after Kindred started bidding for the company earlier this year.
Earlier this month, Kindred had urged Gentiva shareholders to send a "strong signal" to their board by tendering their stock in support of its previous bid of $14.50 per share for the whole company, even though the poison pill would limit Kindred.
That $573 million bid represented an increase from an offer totaling $533 million, or $14 per share in cash and stock, that Kindred announced in May.
Gentiva has said the $14.50-per-share offer significantly undervalued the company and was opportunistic because it exploited a temporary decrease in Gentiva's stock price.
Louisville, Kentucky-based Kindred runs nursing and rehabilitation centers, and its executives say the two companies are "highly complementary."
Kindred CEO Paul J. Diaz said in a statement that his company won't consider increasing its offer again until the leaders of Atlanta-based Gentiva agree to talk and "demonstrate additional value in the due diligence process."
Kindred's latest tender offer for Gentiva's stock expires at 5 p.m. Eastern time July 28.
Shares of Kindred climbed 22 cents to $24.60 Monday morning, while Gentiva jumped 3 percent, or 51 cents, to $16.33. Meanwhile, the Nasdaq composite was up less than 1 percent.