Boston, MA 05/15/2014 (wallstreetpr) – Kindred Healthcare Inc. (NYSE:KND) revealed on Thursday that it had made a $533 million unsolicited offer to acquire Gentiva Health Services, Inc. (NASDAQ:GTIV), which the latter has turned down.
For Shareholder’s Approval
Kindred Healthcare Inc. (NYSE:KND) said that it was ready to pay $14 a share, to be distributed equally in both cash and stock, which is a 64% premium to Gentiva’s Wednesday closing price. Furthermore, Kindred said that it is willing to even pay put in cash completely depending on the preference of Gentiva’s board. The specified offer, including debt values $1.6 billion. The news led to the sharp surge of Gentiva’s shares to match the offered bid price. However, Kindred said that Gentiva Health Services, Inc. (NASDAQ:GTIV) repeatedly rebuffed the offer stating that it is not willing to take the discussion ahead. That forced Kindred to make its plans public so as to make the shareholders of Gentiva aware about the offer.
Kindred Healthcare Inc. (NYSE:KND)’s bid comes at a time when the home health-care industry has become a subject of various scrutiny amidst allegations that health care companies have customized the care to Medicare patients in order to take more out of the federal program. Gentiva Health Services, Inc. (NASDAQ:GTIV) shares that traded close to $30 during 2011, fell below $15, after which it attracted a number of government probes and had to trim down of reimbursement rates.
Deal Benficial
Kindred Healthcare Inc. (NYSE:KND) noted that the merger of Gentiva would allow the company to serve approximately 127,000 patients a day across 47 states, generate revenues of close to $7.2 billion and employ nearly 110,000. Kindred even anticipates the transaction to generate earnings and result in synergies of nearly $60-$80 million within the span of two years of the closure of the deal. Currently, Kindred provides health care services to inpatient rehabilitation hospitals, transitional care hospitals and nursing centers, while Gentiva Health Services, Inc. (NASDAQ:GTIV) offers home health care, which is increasingly growing in demand.
