Long-term care provider Genesis HealthCare is fighting to gain shareholder approval for a proposed buyout by investors, hoping to win shareholders back after an adverse recommendation by an advisory firm put the deal in doubt. Genesis, which operates more than 200 skilled nursing centers and assisted living residences in addition to providing contract rehab services to 600 providers, has been offered $63 per share by private equity firms Formation Capital and JER Partners. However, the deal doesn't appeal to influential stock advisory firm Institutional Shareholder Services, which has recommended that shareholders reject the $1.25 billion offer and wait to see if a better one comes along. Genesis executives, however, are telling shareholders that there are no other deals afoot, that the offer is generous, that the deal will close quickly, and that stock prices could tank if the deal doesn't move ahead (particularly if Medicare and Medicaid reimbursement rates for skilled nursing don't keep up with inflation). Shareholders will vote on the proposed sale on April 19.
To get more background on the deal:
- read this Associated Press piece
- see the Genesis press release