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Genesis Urges Shareholder Vote for Buy-Out

KENNETT SQUARE, PA-Amid disputes over the bidding process, the company tells shareholders the offer by the Formation/JER venture is the highest price offered.

By Marita Thomas | Updated on April 13, 2007

KENNETT SQUARE, PA-Genesis HealthCare Corp. has sent a letter to shareholders urging them to vote in favor of its pending acquisition by a joint venture between Formation Capital and JER Partners. The letter says, “no higher offers have been received,” and adds, “any suggestion to the contrary is untrue.”

This comes after a March 29 complaint, filed by Drumm Investors LLC in the Chester County Court of Common Pleas, alleging that Genesis breached commitments to Drumm in connection with the bidding process. Drumm owns Genesis rival Beverly Enterprises Inc. Genesis terms the lawsuit “without merit” and says it will “vigorously defend itself against the claims.”

In the shareholder letter, Genesis says, “The final offer price was driven by an active, competitive auction involving all likely, credible bidders, which yielded four highly interested bidders all of whom submitted ‘best and final’ offers–none of these bids was higher than the final transaction price.” It followed the letter with an announcement that Vienna, VA-based Proxy Governance Inc., an independent proxy advisory that evaluates proxy issues, also recommends that shareholders vote for the offer.

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