Gentiva Is Preventing Its Shareholders from
Receiving an Immediate and Certain 70% Cash Premium
Gentiva Has Not Demonstrated How It Would
Create Value Greater Than Kindred Is Offering
Kindred Urges Gentiva Shareholders to Tender
their Shares in Support of its Value Enhancing Offer
Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND)
today responded to the decision by the board of directors of
Gentiva Health Services, Inc. (“Gentiva”) (NASDAQ:GTIV)
recommending against Kindred’s offer to acquire all of Gentiva’s
outstanding common stock for $14.50 per share in cash.
Paul J. Diaz, Chief Executive Officer of Kindred, said, “After
reviewing Gentiva’s recommendation, it remains clear that Kindred’s
offer would create immediate, certain and superior value for
Gentiva shareholders. We call on the Gentiva board and management
team to sit down and negotiate a transaction that would advance the
interests of both companies’ shareholders, employees and patients,
as well as our country’s healthcare delivery system. We also call
on Gentiva shareholders to make their voices heard by tendering
their shares in support of Kindred’s value enhancing offer.”
Kindred noted the following:
- Kindred’s all-cash offer provides
immediate and certain value to Gentiva’s shareholders at a time
when Gentiva’s prospects are uncertain. Gentiva highlighted its
pre-offer 52-week high stock price of $13.85, which it reached on
August 14, 2013. Notably, this was before the market reflected a
wide range of new concerns about Gentiva, including operational
difficulties and integration challenges. In addition, the August
14, 2013 stock price does not reflect the material changes to home
health reimbursement (“rebasing”) that became effective on January
1, 2014, nor does it account for significant reimbursement
headwinds that Gentiva will face this year and for several years to
come. As a multiple of EBITDA, our proposal represents a valuation
greater than Gentiva has achieved on a standalone basis at any
point during the last five years leading up to our offer.
- Kindred’s offer represents a 45%
premium to Wall Street analysts’ unaffected one-year median price
target of $10.00 per share. We believe that Gentiva based its
recommendation to its shareholders on unsubstantiated projections
that are inconsistent with the market’s assessment of Gentiva’s
prospects. While Gentiva is using analyst estimates for its peers,
it is asking its shareholders to trust management’s projections,
which have been unreliable in the past, and which Wall Street does
not believe are achievable.
- Kindred’s $14.50 per share cash
offer values Gentiva at approximately 9.3 times research analysts’
2014 EBITDA estimates. Gentiva's public company peers trade at
an average enterprise value of approximately 9.4 times research
analysts' 2014 EBITDA estimates. Discussions and appropriate due
diligence would help determine any additional value to be delivered
through Gentiva’s ‘One Gentiva’ plan.
- Kindred is prepared to share the
expected synergies with Gentiva shareholders through cash and stock
consideration. Gentiva noted that its shareholders should also
benefit from the synergies to be realized in the proposed
combination. Kindred’s offer to include equity - which many Gentiva
shareholders have told us they would prefer - would allow Gentiva
shareholders to participate in the upside potential of the proposed
combination.
Kindred believes its all-cash offer would deliver immediate and
certain value that significantly exceeds what Gentiva shareholders
could expect Gentiva to deliver on a standalone basis. The Kindred
offer of $14.50 per share represents a 70% premium to Gentiva’s
closing share price on May 14, 2014 (the day prior to Kindred
making its proposal public) and a 64% premium over Gentiva’s 60-day
volume-weighted average closing price on May 14, 2014.
In order to send a strong signal to the Gentiva board, Kindred
continues to urge all Gentiva shareholders to tender their shares
in support of its value enhancing offer. If a majority of the
outstanding Gentiva shares are tendered prior to July 16, 2014,
Kindred intends to amend the offer to seek to purchase 14.9% of
Gentiva’s outstanding shares, positioning Kindred as Gentiva’s
largest shareholder.
Forward-Looking
Statements
This press release includes forward-looking statements
including, but not limited to, statements regarding the Company’s
ability to complete the Offering, the Company’s anticipated use of
proceeds from the Offering, the tender offer for Gentiva common
stock and the Company’s proposed business combination transaction
with Gentiva (including financing of the proposed transaction and
the benefits, results, effects and timing of a transaction), all
statements regarding the Company’s (and the Company and Gentiva’s
combined) expected future financial position, results of
operations, cash flows, dividends, financing plans, business
strategy, budgets, capital expenditures, competitive positions,
growth opportunities, plans and objectives of management, and
statements containing the words such as “anticipate,”
“approximate,” “believe,” “plan,” “estimate,” “expect,” “project,”
“could,” “would,” “should,” “will,” “intend,” “may,” “potential,”
“upside,” and other similar expressions. Statements in this press
release concerning the business outlook or future economic
performance, anticipated profitability, revenues, expenses,
dividends or other financial items, and product or services line
growth of the Company (and the combined businesses of the Company
and Gentiva), together with other statements that are not
historical facts are forward-looking statements that are estimates
reflecting the best judgment of the Company based upon currently
available information.
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that
actual results may differ materially from the Company’s
expectations as a result of a variety of factors, including,
without limitation, those discussed below, set forth in the
Company’s Annual Report on Form 10-K and in its reports on Forms
10-Q and 8-K. Such forward-looking statements are based upon
management’s current expectations and include known and unknown
risks, uncertainties and other factors, many of which the Company
is unable to predict or control, that may cause the Company’s
actual results, performance or plans to differ materially from any
future results, performance or plans expressed or implied by such
forward-looking statements. These statements involve risks,
uncertainties and other factors discussed below and detailed from
time to time in the Company’s filings with the SEC.
Risks and uncertainties related to the tender offer and proposed
transaction with Gentiva include, but are not limited to,
uncertainty as to whether the Company will further pursue, enter
into or consummate the offer or any transaction on the proposed
terms or on other terms, potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the offer or any transaction, uncertainties as to the
timing of the offer or any transaction, adverse effects on the
Company’s stock price resulting from the announcement or
consummation of the offer or any transaction or any failure to
complete the offer or any transaction, competitive responses to the
announcement or consummation of the offer or any transaction, the
risk that regulatory, licensure or other approvals and financing
required for the consummation of the offer or any transaction are
not obtained or are obtained subject to terms and conditions that
are not anticipated, costs and difficulties related to the
integration of Gentiva’s businesses and operations with the
Company’s businesses and operations, the inability to obtain, or
delays in obtaining, cost savings and synergies from the offer or
any transaction, uncertainties as to whether the consummation of
the offer or any transaction will have the accretive effect on our
earnings or cash flows that we expect, unexpected costs,
liabilities, charges or expenses resulting from the offer or any
transaction, litigation relating to the offer or any transaction,
the inability to retain key personnel, and any changes in general
economic and/or industry-specific conditions.
Many of these factors are beyond the Company’s control. The
Company cautions investors that any forward-looking statements made
by the Company are not guarantees of future performance. The
Company disclaims any obligation to update any such factors or to
announce publicly the results of any revisions to any of the
forward-looking statements to reflect future events or
developments.
Additional Information
This press release is provided for informational purposes only
and does not constitute an offer to purchase or the solicitation of
an offer to sell any securities of Gentiva. The solicitation and
offer to buy Gentiva common stock have been made pursuant to an
offer to purchase and related materials, as they may be amended
from time to time. Investors and shareholders should read those
filings carefully as they contain important information, including
the terms and conditions of the offer. The offer to purchase and
related materials, as well as Kindred’s other public filings, have
been filed with the SEC and may be obtained without charge at the
SEC’s website at www.sec.gov and at Kindred’s website at
www.kindredhealthcare.com. The Offer to Purchase and related
materials may also be obtained for free by contacting the
information agent for the tender offer, D.F. King & Co., Inc.
at (212) 269-5550 (collect) or (800) 859-8508 (toll-free) or by
email at gentivaoffer@dfking.com.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-150 private employer in the
United States, is a FORTUNE 500 healthcare services company based
in Louisville, Kentucky with annual revenues of $5 billion and
approximately 63,000 employees in 47 states. At March 31, 2014, Ki
ndred through its subsidiaries provided healthcare services in
2,313 locations, including 100 transitional care hospitals, five
inpatient rehabilitation hospitals, 99 nursing centers, 22
sub-acute units, 157 Kindred at Home hospice, home health and
non-medical home care locations, 105 inpatient rehabilitation units
(hospital-based) and a contract rehabilitation services business,
RehabCare, which served 1,825 non-affiliated facilities. Ranked as
one of Fortune magazine’s Most Admired Healthcare Companies for six
years in a row, Kindred’s mission is to promote healing, provide
hope, preserve dignity and produce value for each patient,
resident, family member, customer, employee and shareholder we
serve. For more information, go to www.kindredhealthcare.com.
Media:Kindred Healthcare,
Inc.Susan Moss, 502-596-7296Senior Vice President, Marketing and
CommunicationsorJoele Frank, Wilkinson Brimmer KatcherAndy Brimmer
/ Andrew Siegel, 212-355-4449orInvestors
and Analysts:Kindred Healthcare, Inc.Hank Robinson,
502-596-7732Senior Vice President, Tax and TreasurerorD.F. King
& Co., Inc.Jordan Kovler / Kristian Klein, 212-232-2247
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