Hospital operator Kindred Healthcare Inc (KND.N) raised its offer for home healthcare services provider Gentiva Health Services Inc GTIV.O to $573 million, a little over three weeks after Gentiva said it adopted a poison pill to counter the hostile bid.
Kindred raised its offer by 50 cents per share to $14.50 per share in cash, which represent a premium of 3.65 percent to Gentiva's closing price on Monday.
The offer represents a premium of 70 percent to Gentiva's closing price on May 13, the day prior to Kindred making public its offer to acquire Gentiva, Kindred said.
With the assumption of Gentiva's debt, the deal will be valued at about $1.7 billion, Kindred said. Kindred said on May 15 that it made its $14-per-share offer public since Gentiva was unwilling to discuss a potential deal to create a company with adjusted annual revenue of about $7.2 billion offering a full spectrum of services to an aging U.S. population.
Gentiva had rejected the bid saying it could generate more value as a standalone company and, later that month, adopted a poison pill with a trigger of 15 percent.
Kindred said on Monday if it could not buy all of Gentiva's shares, it would look to acquire 14.9 percent of Gentiva's stock, making it the largest shareholder in the company.
"Although Gentiva's board has put in place a poison pill, we are moving forward with an all-cash tender offer to demonstrate our commitment to completing this transaction and to provide Gentiva shareholders with an opportunity to make their collective voice heard," Kindred Chief Executive Paul Diaz said.
"Poison pills", also called shareholder rights plans, are designed to stop hostile takeover attempts by triggering the issue of new shares that dilute the holdings of investors who exceed a set threshold.
Kindred said it would finance the deal with a mix of debt and equity.
The deal will add about $60-80 million in financial synergies to earnings and cash flow annually, Kindred said.
Citigroup acted as financial adviser to Kindred.
Shares of Kindred were down 1.5 percent at $25.34 in extended trading, while those of Gentiva were up 4 percent at $14.54.
(Reporting by Ankit Ajmera in Bangalore; Editing by Maju Samuel)