Kindred Sweetens Gentiva Bid To $14.50 Per Share

(RTTNews) - Kindred Healthcare Inc (KND) Monday sweetened its hostile bid for Gentiva Health Services Inc (GTIV) by fifty cents a share, and said it will commence tomorrow a cash tender offer for all shares of the home health and hospice services provider.

Kindred now offers to acquire Gentiva for $14.50 per share in cash, for a total equity value of about $573 million. Including debt, the deal would be valued at about $1.7 billion.

The offer represents a 70 percent premium to Gentiva's closing share price on May 14 - the day prior to Kindred making public its proposal to acquire Gentiva.

As per the initial offer on May 15, Kindred proposed to acquire Gentiva for $14 per share in a cash and stock deal valued at about $533 million. Including debt, the deal was valued at about $1.6 billion. Gentiva spurned the deal, stating that it undervalues the company and went ahead with a poison pill to thwart any takeover.

Following the poison pill move, Kindred today said it intends to amend the offer to seek to purchase 14.9 percent of Gentiva's outstanding shares and become Gentiva's largest shareholder.

Kindred CEO Paul Diaz said, "We believe that our enhanced $14.50 per share cash tender offer would deliver a significant and immediate premium to Gentiva's shareholders, and we remain confident that uniting our two highly complementary businesses would create a unique platform for coordinated patient care and deliver compelling clinical, strategic and financial benefits for all stakeholders."

Louisville, Kentucky-based Kindred said 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.

Also, Kindred said it has launched an underwritten public offering for an aggregate of 9 million of its shares. The company intends to grant the underwriters a 30-day option to purchase up to an additional 1.35 million shares. Kindred intends to use the proceeds from the offering to finance potential acquisitions or for general corporate purposes.

Kindred stock closed Monday at $25.76, up $0.26 or 1.02%, on a volume of 175k shares on the NYSE.

Gentiva closed at $13.99, up $0.10 or 0.72%, on a volume of 318k shares on the Nasdaq. In after hours, the stock gained $0.61 or 4.36%.