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Formation, JER Raises Bid to $1.7B

NEWTOWN SQUARE, PA-Amidst contention over the bidding process, the private equity partnership adds $1.25 per share to its original offer.

By Marita Thomas | Updated on April 24, 2007

NEWTOWN SQUARE, PA-The partnership between Formation Capital LLC and JER Partners has raised its offer to buy Genesis HealthCare Corp. by 2%, lifting the price from $63 per share to $64.25 per share. That adds about $25 million to the agreement struck this January, pushing the price above $1.7 billion by including the assumption of $475 million in debt versus an initial debt assumption of $450 million.

The amendment to the merger agreement came after Northbrook, IL-based Northbrook GH LLC charged Genesis with “stacking the deck against any other bidder.” Northbrook owns approximately 5% of Genesis stock. In a letter to Genesis management, Northbrook estimated the value at between $69 and $71 per share.

In response, Genesis issued a statement saying the bidding was an “active, competitive auction process” and that “none of the offers was anywhere near Northbrook’s purported valuation of the company.” Following the amended offer, Genesis pushed the shareholder vote to May 4.

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