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Fillmore, Genesis Trade Barbs About Bids

KENNETT SQUARE, PA-Counter accusations follow counter offers for the healthcare REIT, which continues to favor the Formation/JER offer.

By Marita Thomas | Updated on May 23, 2007

KENNETT SQUARE, PA-Rancor has spilled out in a statement from San Francisco-based Fillmore Capital Partners LLC. It followed news that a joint venture between Formation Capital LLC and JER Partners had again bested Fillmore’s offer to acquire Genesis HealthCare Corp. The locally based healthcare REIT responded with a statement saying, “It was Fillmore’s choice not to improve its bid.”

In its statement, Fillmore charges that although it had seven times offered to acquire Genesis for a higher price than any current proposal, Genesis amended its agreement with the JV, which raised the bid to the current $69.35 a share, without giving Fillmore “the opportunity to make a superior bid for Genesis for the eighth time. Most importantly,” it continues, the amended agreement provides “Formation with a $40-million termination fee, having the effect of prematurely terminating this auction for the second time.”

It calls this “wanton disregard for the interests of the Genesis shareholders,” and says it had encouraged the Genesis board to give it an opportunity to respond if its seventh offer was matched or breached. Furthermore, Ronald Silva, Fillmore’s president and CEO, charges, “one member of the Genesis board has a personal financial interest in direct conflict with his fiduciary duties to shareholders.” The member is not named, and a call to Fillmore was not returned by deadline.

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