The latest offer takes the total tally to approximately $1.9 billion, which includes the assumption of about $475 million in debt. It bests the most recent Fillmore offer by $0.10 per share and also represents a premium of 44.3% over the average close of GHCI shares on the Nasdaq over the 30 days prior to its original January offer.
Following the January offer, a disgruntled shareholder, Northbrook GH LLC, accused Genesis of "stacking the deck against any other bidder" and valued the company at between $69 and $71 per share. Formation/JER raised its bid, and, in April, Fillmore stepped in with an even better offer.
The Genesis board has consistently continued to recommend that shareholders vote in favor of the Formation/JER transaction, despite its admission that Fillmore's May 15 offer of $69.25 per share was "superior" to the JV's offer on the table at that time. It also delayed a shareholder vote for the second time, setting it for May 30, and gave the JV four days to submit a counter offer, which it did just under the wire.
Under this Formation/JER bid, if the transaction is not completed by July 31, the price will increased by 9% a year, or $0.01710 a day from July 31 through Aug. 31, and by 10% a year, or $0.01900 a day from Sept. 1 until the transaction closes. Furthermore, this amended agreement calls for Genesis to pay a termination fee of $40 million if it enters into a "superior transaction with a third party."
Based on the unanimous recommendation of a special committee of independent, non-management directors, Genesis' board has approved the JV's amended merger agreement. It calls the JV's revised offer superior to Fillmore's and recommends shareholders vote in its favor.
Meanwhile, during the bidding war GHCI common stock hit a new high of $69.24 per share before settling to $68.70 per share by mid-day on May 21. This compares with a 52-week low of $43.72 per share.
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