Friday, May 30, 2014

Kindred Undeterred in Pursuit of Gentiva


Gentiva remains in Kindred's sights, even after executing a "poison pill" defense. Here's the text of Kindred's letter to Gentiva's Chairman Rod Windley and CEO Tony Strange:

Since the May 15, 2014 public announcement of our offer to acquire Gentiva for total consideration of $14.00 per share, we have heard from both companies’ shareholders – and sell-side research analysts have reported – that they support a combination and that the price is a very compelling and significant premium to Gentiva’s historic trading price and projected earnings estimates. We are certain you have heard the same from your shareholders.

We are disappointed, however, that instead of listening to your shareholders – the true owners of Gentiva – and immediately entering into good faith negotiations with Kindred, your Board has instead implemented a poison pill that limits shareholders’ opportunity to maximize the value of their investment. We question the motive and timing of such implementation, which limits not just Kindred, but all Gentiva shareholders from increasing their investment in the company.

Gentiva has been steadfastly unwilling to begin a dialogue with Kindred, and we believe the implementation of a poison pill further demonstrates that Gentiva is ignoring the will of its shareholders. As you know, our offer represents a 64% premium to Gentiva’s share price on May 14, 2014 (the day prior to Kindred making public the offer) and a 40% premium to Wall Street analysts’ one-year median price target of $10.00 per share. We urge the Gentiva Board to stop erecting obstacles and to immediately engage with our Board and management team to reach agreement on this value creating transaction.

Despite Gentiva’s actions, we will not be deterred. We are determined to pursue the proposed combination of Kindred and Gentiva and are committed over the long-term to achieving our objective. We are ready, willing and able to quickly proceed toward consummating a negotiated transaction.

Paul J. Diaz
Chief Executive Officer
Kindred Healthcare, Inc.
If these were two people dating, Kindred's intent could be viewed as rape. They will have Gentiva no matter what.  How does Phyllis R. Yale, Kindred's Chair, feels about a forced combination?

Anonymous (from Gentiva)


  1. YIKES...once again, a very extreme and diabolical viewpoint and rather upsetting to read. Keep in mind, regardless of all of the shenanigans, shareholder approval is still required. 51% need to say "YES." to consumate the deal (to put it in your language). That is part of being a publically-held company. The pursuer still needs to go to the shareholders and gain their support, which is the case for any publically-held. That being the process for any publicly-held company, I don’t think a comparison to RAPE is a fair assessment. Here we have one company going after the other and being told “NO.” The rejected party keeps pursuing and in order to get legally married goes to the families (shareholders) and attempts to gain their support. If the families say “YES,” the pursued company now has to get married. But, this begs the question, is it forced? It clearly is not RAPE. In your scenario, the few who may say “NO” are raped, but ultimately it is the will of the majority of shareholders. And if the majority of shareholders say “YES,” no crime has occurred as they willfully are getting married!! Shareholders own the company and THEY say “YES” or “NO.” Nice try, but no dice with me. It almost sounded like you were taking pity on the evil management ranks at Gentiva.

    Keeping it real like Happy Meal. It's Friday, be Happy!

    1. Anonymous,

      Kindred's President used the word "consummating." He said he "will not be deterred." Those are Paul Diaz's words, not mine.

      Anonymous (from the pursued Gentiva)

    2. Also, the deal could be looked at as a forced marriage, common in other cultures. Given investment houses control over 50% of Gentiva's stock, they could be viewed as the child's family. Wall Street, with its values nearly the opposite of hospice's collaborative, volunteer origin, will likely decide Gentiva's future. Will Kindred's dowry be the largest? This suitor stated it will not be deterred and wishes to consummate the union.

      There are many analogies for Kindred's actions. Anonymous (from unknown origin), you utilize a business framework, which I clearly understand. Our current version tends to minimize and denigrate relationships.

      It would be real if people could talk openly about things and not have them minimized by "Don't worry, be happy" sentiments.

      Our leaders have proven they don't have our interests at heart. Gentiva's selfishness and greed have bumped into Kindred's selfishness and greed. Aware, I can make my way and be a blessing to patients and coworkers. Render unto Tony Strange, that which is Tony Strange's.

      Anonymous (from Gentiva)

    3. YIIKES...Merger approved by shareholders. How's your future looking?

      Anonymous (from Gentiva)