Kindred Healthcare is urging Gentiva Health Services shareholders to support Kindred's latest acquisition bid, which faces opposition from both Gentiva's board and an anti-takeover measure the health and hospice service provider adopted last month.
Kindred Healthcare Inc., which runs nursing and rehabilitation centers, said Tuesday its all-cash offer of $14.50 per share provides immediate and certain value to Gentiva shareholders. That $573 million bid represents an increase from an offer totaling $533 million, or $14 per share in cash and stock, that Kindred announced in May.
Gentiva Health Services Inc. had rejected the previous bid and adopted a shareholder rights plan, or "poison pill" measure, that limits shareholders from acquiring more than a 15 percent stake. On Monday, Gentiva rejected the improved offer as well, saying it significantly undervalued the company and was opportunistic because it exploits a temporary decrease in Gentiva's stock price.
Kindred on Tuesday said that all Gentiva stock owners should send a "strong signal" to Gentiva's board by tendering their shares in support of the increased offer. If a majority of Gentiva's shares are tendered, Kindred said it expects to amend the offer to purchase 14.9 percent of Gentiva's shares, a move that would make it the largest shareholder and avoid triggering the poison pill measure.
A Kindred spokeswoman said the company currently owns only a "small number" of Gentiva shares.
Kindred is based in Louisville, Kentucky, and Gentiva is headquartered in Atlanta.
Shares of Kindred climbed 10 cents to $23.20 in Tuesday afternoon trading, while Gentiva rose nearly 3 percent, or 43 cents, to $15.49. Meanwhile, the Nasdaq composite was up about 1 percent.