Beverly Enterprises Agrees to Increase in Merger Price to $13.00 Per Share
24 August 2005 - 11:01PM
Business Wire
Beverly Enterprises, Inc. ("BEI") (NYSE: BEV) announced today that
it has entered into an amendment to the merger agreement with North
American Senior Care (NASC), Inc., in which NASC agreed to increase
its purchase price for BEI from $12.80 per share to $13.00 per
share, in cash. On a fully diluted basis, the transaction is valued
at more than $1.9 billion. Consistent with its fiduciary
obligations to shareholders, and after review and negotiations
conducted by its independent financial and legal advisors with both
NASC and the Formation Capital Consortium, BEI's Board of Directors
voted to accept NASC's increased purchase price. The Board's
decision was based on its conclusion that the increased price,
modified terms and likelihood of completion of this agreement are
in the best interests of BEI shareholders. William R. Floyd, BEI
Chairman and Chief Executive Officer said, "This has been a lengthy
and very comprehensive process, involving detailed financial and
legal analyses that the Board of Directors has conducted in close
consultation with its independent advisors. It is not uncommon in
auction situations for proposals and counter-proposals to be
received, but from the outset the Board has been guided by the
paramount goal of selecting the bidder that offers stockholders the
best combination of price, terms and conditions. Based on these
criteria, the Board concluded that the increased offer from NASC
was in the best interests of BEI shareholders. As a result, BEI has
entered into an amendment to the original merger agreement with
North American Senior Care." The amended agreement contemplates
that the financing of the transaction will consist of approximately
$330 million in equity provided by a private investor group,
together with approximately $1.325 billion in debt financing from
Wachovia Bank and $550 million in operating loans from
CapitalSource Financing LLC. The merger is subject to the approval
of BEI's shareholders, as well as customary legal conditions,
including receipt of certain regulatory, governmental and licensing
approvals. Also under the amended agreement, in certain
circumstances NASC would be entitled to a termination fee of $40
million, which is subject to increase upon the provision of
additional security by NASC. The amendment to the agreement for
this transaction is being filed by BEI today on Form 8-K with the
Securities and Exchange Commission, and will be publicly available
for review. IMPORTANT INFORMATION In connection with the merger
with North American Senior Care, Inc. ("NASC"), Beverly
Enterprises, Inc. ("BEI") will file a proxy statement and other
materials with the Securities and Exchange Commission. BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO
READ THE PROXY STATEMENT AND THESE MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. BEI and
its officers and directors may be deemed to be participants in the
solicitation of proxies with respect to any proposed transaction.
Information regarding such individuals is included in the Company's
proxy statements and Annual Reports on Form 10K previously filed
with the Securities and Exchange Commission and will be included in
the proxy statement relating to the proposed transaction when it
becomes available. You may obtain BEI's proxy statement, when it
becomes available, any amendments or supplements to the proxy
statement and other relevant documents free of charge at
www.sec.gov. You may also obtain a free copy of BEI's proxy
statement, when it becomes available, any amendments and
supplements to the proxy statement and other relevant documents by
writing to BEI at 1000 Beverly Way, Fort Smith, Arkansas 72919,
Attn: Investor Relations or at www.beverlycorp.com under the tab
"Investor Information" and then under the heading "SEC Filings".
FORWARD LOOKING STATEMENTS The statements in this document relating
to matters that are not historical facts are forward-looking
statements based on management's beliefs and assumptions using
currently available information and expectations as of the date
hereof. Forward-looking statements are not guarantees of future
performance and involve certain risks and uncertainties, including
the risks and uncertainties detailed from time to time in BEI's
filings with the Securities and Exchange Commission. In particular,
statements regarding the consummation of the merger with North
American Senior Care are subject to risks that the conditions to
the transaction will not be satisfied, including the risk that
regulatory approvals will not be obtained. In addition, our results
of operations, financial condition and cash flows may be adversely
impacted by the recently concluded auction process, the
announcement of the proposed transaction with North American Senior
Care and the announcement of the recent proposal by the Formation
Capital Consortium. All of these events may impact our ability to
attract and retain customers, management and employees. We have
incurred and will continue to incur significant advisory fees and
other expenses relating to the auction process, the transaction
with North American Senior Care and the recent proposal by the
Formation Capital Consortium. Although BEI believes that the
expectations reflected in such forward-looking statements are
reasonable, it cannot give any assurances that these expectations
will prove to be correct. BEI assumes no duty to publicly update or
revise such statements, whether as a result of new information,
future events or otherwise.
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