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
LOUISVILLE, Ky.--(BUSINESS WIRE)--
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
- 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.
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
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.
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 email@example.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.
Source: Kindred Healthcare, Inc.