Beverly Enterprises (NYSE:BEV)
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Beverly Enterprises, Inc. ("BEI") (NYSE: BEV) announced
today that it has entered into an amendment to the merger agreement
with North American Senior Care (NASC), Inc., in which NASC agreed to
increase its purchase price for BEI from $12.80 per share to $13.00
per share, in cash. On a fully diluted basis, the transaction is
valued at more than $1.9 billion.
Consistent with its fiduciary obligations to shareholders, and
after review and negotiations conducted by its independent financial
and legal advisors with both NASC and the Formation Capital
Consortium, BEI's Board of Directors voted to accept NASC's increased
purchase price. The Board's decision was based on its conclusion that
the increased price, modified terms and likelihood of completion of
this agreement are in the best interests of BEI shareholders.
William R. Floyd, BEI Chairman and Chief Executive Officer said,
"This has been a lengthy and very comprehensive process, involving
detailed financial and legal analyses that the Board of Directors has
conducted in close consultation with its independent advisors. It is
not uncommon in auction situations for proposals and counter-proposals
to be received, but from the outset the Board has been guided by the
paramount goal of selecting the bidder that offers stockholders the
best combination of price, terms and conditions. Based on these
criteria, the Board concluded that the increased offer from NASC was
in the best interests of BEI shareholders. As a result, BEI has
entered into an amendment to the original merger agreement with North
American Senior Care."
The amended agreement contemplates that the financing of the
transaction will consist of approximately $330 million in equity
provided by a private investor group, together with approximately
$1.325 billion in debt financing from Wachovia Bank and $550 million
in operating loans from CapitalSource Financing LLC.
The merger is subject to the approval of BEI's shareholders, as
well as customary legal conditions, including receipt of certain
regulatory, governmental and licensing approvals.
Also under the amended agreement, in certain circumstances NASC
would be entitled to a termination fee of $40 million, which is
subject to increase upon the provision of additional security by NASC.
The amendment to the agreement for this transaction is being
filed by BEI today on Form 8-K with the Securities and Exchange
Commission, and will be publicly available for review.
IMPORTANT INFORMATION
In connection with the merger with North American Senior Care,
Inc. ("NASC"), Beverly Enterprises, Inc. ("BEI") will file a proxy
statement and other materials with the Securities and Exchange
Commission. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS
ARE URGED TO READ THE PROXY STATEMENT AND THESE MATERIALS WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. BEI
and its officers and directors may be deemed to be participants in the
solicitation of proxies with respect to any proposed transaction.
Information regarding such individuals is included in the Company's
proxy statements and Annual Reports on Form 10K previously filed with
the Securities and Exchange Commission and will be included in the
proxy statement relating to the proposed transaction when it becomes
available. You may obtain BEI's proxy statement, when it becomes
available, any amendments or supplements to the proxy statement and
other relevant documents free of charge at www.sec.gov. You may also
obtain a free copy of BEI's proxy statement, when it becomes
available, any amendments and supplements to the proxy statement and
other relevant documents by writing to BEI at 1000 Beverly Way, Fort
Smith, Arkansas 72919, Attn: Investor Relations or at
www.beverlycorp.com under the tab "Investor Information" and then
under the heading "SEC Filings".
FORWARD LOOKING STATEMENTS
The statements in this document relating to matters that are not
historical facts are forward-looking statements based on management's
beliefs and assumptions using currently available information and
expectations as of the date hereof. Forward-looking statements are not
guarantees of future performance and involve certain risks and
uncertainties, including the risks and uncertainties detailed from
time to time in BEI's filings with the Securities and Exchange
Commission. In particular, statements regarding the consummation of
the merger with North American Senior Care are subject to risks that
the conditions to the transaction will not be satisfied, including the
risk that regulatory approvals will not be obtained.
In addition, our results of operations, financial condition and
cash flows may be adversely impacted by the recently concluded auction
process, the announcement of the proposed transaction with North
American Senior Care and the announcement of the recent proposal by
the Formation Capital Consortium. All of these events may impact our
ability to attract and retain customers, management and employees. We
have incurred and will continue to incur significant advisory fees and
other expenses relating to the auction process, the transaction with
North American Senior Care and the recent proposal by the Formation
Capital Consortium. Although BEI believes that the expectations
reflected in such forward-looking statements are reasonable, it cannot
give any assurances that these expectations will prove to be correct.
BEI assumes no duty to publicly update or revise such statements,
whether as a result of new information, future events or otherwise.