BEI's 2.75% Convertible Subordinated Notes Eligible for Conversion
23 February 2006 - 8:10AM
Business Wire
Beverly Enterprises, Inc. ("BEI") (NYSE: BEV) announced today that,
as a result of its pending merger, its 2.75 percent Convertible
Subordinated Notes due 2033 (the "Notes") may be surrendered for
conversion into BEI common stock at any time from and after
February 27, 2006 (which is 15 days prior to the expected effective
date of the merger) until 15 days after the actual date of the
merger. The conversion rate for the Notes is 134.1922 shares of BEI
common stock per $1,000 principal amount of Notes, or approximately
$7.45 per share of BEI common stock. However, any note submitted
for conversion on or after the effective time of the merger on the
date of the merger will be converted into the merger consideration,
which is $12.50 per share in cash. The right to convert Notes as a
result of the pending merger is separate and apart from any other
right to convert that holders of the Notes may have. Specifically,
the indenture governing the Notes provides that holders may convert
any of their Notes into BEI common stock during any fiscal quarter
if the sale price of the common stock for at least 20 consecutive
trading days in the 30 trading days ending on the last trading day
of the immediately preceding fiscal quarter exceeds 120 percent of
the conversion price on that 30th trading day. As we noted in our
press release dated January 4, 2005, the Notes are currently
convertible pursuant to this provision of the indenture through and
including March 31, 2006. To convert interests in a global Note
held through the Depository Trust Company ("DTC"), the holder must
deliver to DTC the appropriate instruction form for conversion
pursuant to DTC's conversion program, and to convert certificated
Notes a holder must complete the conversion notice on the back of
the Note and deliver the executed notice (or facsimile thereof) to
the Bank of New York, as Trustee and Conversion Agent for the
Notes. In addition, if a holder requests that the BEI common stock
issuable upon conversion of the Notes be issued in the name of or
delivered to someone other than the holder, the holder must pay all
applicable transfer taxes and duties, if any (in each case as more
fully set forth in the indenture governing the Notes). This press
release is only a summary of certain provisions of the Notes and
the indenture governing the Notes. A complete explanation of the
conversion rights of holders of the Notes, as well as the
procedures required to convert Notes, is set forth in the First
Supplemental Indenture, dated as of October 22, 2003, which was
previously attached as an Exhibit to the Company's Current Report
on Form 8-K, filed with the Securities and Exchange Commission on
October 23, 2003. All holders are urged to review the conversion
provisions contained in the Notes and the indenture in their
entirety. FORWARD-LOOKING STATEMENTS The statements in this
document relating to matters that are not historical facts are
forward-looking statement based on management's beliefs and
assumptions using currently available information 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. 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
update or revise such statements, whether as a result of new
information, future events or otherwise. BEI, through its operating
subsidiaries, is a leading provider of healthcare services to the
elderly in the United States. BEI currently operates 342 skilled
nursing facilities, as well as 18 assisted living centers, and 67
hospice and home care centers. Through Aegis Therapies, Inc., BEI
also offers rehabilitative services on a contract basis to
facilities operated by other care providers.
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