Genesis Healthcare Announces Amended Merger Agreement with Formation Capital And JER Partners
May 19 2007 - 1:14PM
Business Wire
Genesis HealthCare Corporation (�GHC� or �Genesis�) (NASDAQ: GHCI)
today announced that it has amended its merger agreement with a
venture between affiliates of Formation Capital, LLC (�Formation�)
and JER Partners (�JER�) to increase the consideration payable to
Genesis shareholders to $69.35 per share in cash. Under the amended
agreement, if the transaction is not completed prior to July 31,
2007, the purchase price will increase by approximately 9% per
annum, or $0.01710 per day, from July 31, 2007 through August 31,
2007, and by approximately 10% per annum, or $0.01900 per day, from
September 1, 2007 until the transaction closes. The Board of
Directors of Genesis, acting on the unanimous recommendation of a
Special Committee consisting solely of independent, non-management
directors, has approved the amended merger agreement and recommends
that shareholders vote in favor of the Formation/JER transaction.
In making their recommendation to approve the amended merger
agreement, the Special Committee and the Board of Directors
determined that the revised offer from Formation/JER is superior to
the previously announced proposal from Fillmore Capital Partners,
LLC (�Fillmore�). Under that proposal, Fillmore offered to acquire
all outstanding common shares of Genesis for $69.25, increasing by
8% per annum, or $0.01518 per day, from September 1, 2007 until the
transaction closes. The increased price of the Formation/JER
transaction values Genesis at approximately $1.9 billion, including
the assumption of approximately $475 million in debt, and
represents a premium of approximately 44.3 % over the average
closing price for GHC common stock over the 30 days prior to
announcement of the original transaction on January 16, 2007. Under
the amended transaction announced today, the termination fee to be
paid by Genesis to Formation and JER in the event that Genesis
enters into a superior transaction with a third party would be $40
million. The adjourned annual meeting of shareholders, at which the
vote on the Formation/JER transaction will take place, is scheduled
for May 30, 2007 at 10:00 a.m. The meeting will be held at Genesis
headquarters in Kennett Square, Pennsylvania. Only shareholders of
record as of March 5, 2007 are entitled to vote at the annual
meeting. About Genesis HealthCare Corporation Genesis HealthCare
Corporation (NASDAQ: GHCI) is one of the nation's largest long-term
care providers with over 200 skilled nursing centers and assisted
living residences in 13 eastern states. Genesis also supplies
contract rehabilitation therapy to over 600 healthcare providers in
20 states and the District of Columbia. About Formation and JER
Formation Capital is a private equity firm in the senior housing
and long-term care industry. Over the past five years Formation
Capital has completed over $1.5 billion of acquisitions in the
sector and provides asset management services to over 250
facilities nationwide. For more information on Formation Capital,
please visit www.formationcapital.com. JER Partners is the private
equity investment arm of J.E. Robert Companies, a real estate
investment management company with more than 25 years of experience
in sourcing, underwriting and managing a broad spectrum of real
estate equity investments and debt products in North America and
Europe. JER has completed over $1.1 billion of acquisitions in the
senior housing sector. JER�s primary investments are in office,
hospitality, retail, multi-family, healthcare-related real estate
and industrial properties. Other areas of investment include
commercial mortgage-backed securities (�CMBS�) and mezzanine
financing. For more information on JER, please visit www.jer.com.
Forward-Looking Statements A number of the matters discussed in
this document that are not historical or current facts deal with
potential future circumstances and developments, in particular,
information regarding the expected timetable for completing the
transaction, successful integration of the business, benefits of
the transaction and any other statements contained in this news
release that are not purely historical fact are forward-looking
statements. The discussion of such matters is qualified by the
inherent risks and uncertainties surrounding future expectations
generally, and also may materially differ from actual future
experience involving any one or more of such matters. Such
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
projected. Such risks and uncertainties include, but are not
limited to, the approval of the proposed merger by regulatory
agencies, approval of the merger by the shareholders of GHC,
satisfaction of various other conditions to the closing of the
merger contemplated by the merger agreement and the risks that have
been described from time to time in GHC�s reports filed with the
Securities and Exchange Commission (�SEC�), including its
definitive proxy statement in connection with the 2007 annual
meeting of shareholders and its annual report on Form 10-K for the
fiscal year ended September 30, 2006. This document speaks only as
of its date, and each of GHC, JER and Formation disclaims any duty
to update the information herein. Additional Information and Where
to Find It: On March 7, 2007, GHC filed with the SEC, and
thereafter furnished to shareholders, a definitive proxy statement
in connection with its 2007 annual meeting of shareholders. Since
March 7, GHC has filed additional proxy soliciting materials,
including a proxy supplement that was filed with the SEC on April
23, 2007 and a proxy supplement that was filed with the SEC on May
4, 2007, and GHC expects to furnish shareholders with additional
proxy material, including a proxy supplement, relating to the
amendment to the merger agreement announced today. Investors and
security holders are urged to read the proxy statement, its
supplements and other documents filed or to be filed by GHC because
they contain (or will contain when available) important information
about the proposed merger. Investors and security holders may
obtain a free copy of the proxy statement, its supplements and
other documents filed by GHC (when available) at the SEC website at
http://www.sec.gov. The proxy statement, its supplements and other
documents also may be obtained for free from GHC by directing such
request to Genesis HealthCare Corporation, Investor Relations, 101
East State Street, Kennett Square, PA 19348; telephone:
610-925-2000. Participants in the Solicitation GHC and its
directors, executive officers and other members of its management
and employees may be deemed participants in the solicitation of
proxies from its stockholders in connection with the proposed
merger and GHC�s scheduled 2007 annual meeting. Information
regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of proxies from GHC
shareholders is set forth in GHC�s proxy statement filed on March
7, 2007 and in its proxy statements and Annual Reports on Form 10-K
previously filed with the SEC.
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