Boston, MA 06/18/2014 (wallstreetpr) – Kindred Healthcare Inc. (NYSE:KND) is reported to have increased its offer for Gentiva Health Services, Inc. (NASDAQ:GTIV) as it looks to push forward with the possibility of acquiring the latter. The acquisition price now stands at $573 million at a share price of $14.50 representing 3.65% of Gentiva’s closing price as of Monday. The offer also represents a 70% premium of Gentiva’s closing price as of May 13 when Kindred made public its intentions to acquire Gentiva.
Kindred Looking to Become the Biggest Shareholders
According to Kindred Healthcare Inc. (NYSE:KND), taking into consideration Gentiva debt, the deal could reach highs of $1.7 billion. Kindred has already confirmed that it decided to make its $14 a share offer public after Gentiva showed its unwillingness to engage in an open discussion. The merger of the two companies is expected to result in a company with adjusted annual revenue of about $7.2 billion providing an array of service to the aging U.S population.
Gentiva Board to Give a Recommendation
Gentiva rejected the initial bid of $14 reiterating that it could go all the way as a standalone company, and later adopted a poison pill that looks to have triggered an improved bid from Kindred. Kindred Healthcare Inc. (NYSE:KND) has already confirmed that it cannot buy all of Gentiva’s shares but is looking to acquire 14.9% stake that would essentially make it the largest shareholder.
The deal when complete is expected to add between $60 million and $80 million in financial synergies in terms of earnings and cash flows, according to kindred. The deal is to be financed’ with a mix of debt and equity. Gentiva management has already asked its shareholders to abstain from taking any action until the Board of Directors makes a recommendation.
Gentiva’s board of directors is expected to review all the aspects of the offer before giving out the final recommendation to shareholders; this is to be outlined’ on a regulatory filing with the Securities and Exchange Commission.
