Gentiva Health Services Rejects $14/share Offer From Kindred Healthcare

(RTTNews) - Home health and hospice services provider Gentiva Health Services, Inc.'s (GTIV) board on Thursday rejected a unsolicited, non-binding $533 million cash and stock acquisition offer from healthcare services provider Kindred Healthcare, Inc. (KND), saying the offer undervalues the company.

Atlanta, Georgia-based Gentiva said its board has thoroughly evaluated the successive, non-binding proposals of April 14 and May 5 made to its executive chairman and CEO.

"Our focus is on Gentiva shareholders, who would be denied the value they deserve and can expect to receive as we capitalize on our strong positioning in Home Healthcare, Hospice and Community Care," Gentiva Executive Chairman Rod Windley said in a statement.

The current offer was made directly to shareholders after Gentiva rejected Kindred's previous two offers made directly to its executive chairman and CEO. It was also unwillingness to engage in meaningful dialogue on a potential combination of our two companies

Louisville, Kentucky-based Kindred had also conveyed its willingness to increase the cash portion of consideration up to 100 percent at Gentiva shareholders' election. In the Ma 5 offer, Kindred had also indicated its willingness to sweeten the offer to $14 per share from the April 14 offer, which is unknown.

Earlier in the day, Kindred Healthcare proposed to acquire Gentiva for $14 per share in a cash and stock deal valued at about $533 million. The consideration includes $7.00 per share in cash and $7.00 of Kindred common stock. The deal would be valued at about $1.6 billion, including assumed debt.

The offer represents a 64 percent premium over Gentiva's closing price of $8.54 on Wednesday, and a 59 percent premium over Gentiva's 60-day volume-weighted average closing price.

The proposed deal would create a combined company that will be a premier post-acute care provider serving nearly 127,000 patients per day in 47 states in the U.S. The combined company would generating pro forma annual revenues of about $7.2 billion and EBITDAR of nearly $1 billion.

GTIV closed Thursday's regular trading session at $13.83, up $5.29 or 61.94% on a volume of 6.64 million shares. However, the stock lost $0.15 or 1.08% in after-hours trading. KND closed at $24.32, up $2.40 or 10.95% on a volume of 1.77 million shares.