Private equity firms Formation Capital LLC and JER Partners tried hard for their $1.25 billion offer for Genesis HealthCare Corp. (NASDAQ: GHCI). But Institutional Shareholder Services thought the valuation was too low and that shareholders should reject the offer.In response, Genesis wrote a letter to shareholders – practically begging them to vote for the deal.
Well, money works better. So, this week, Formation and JER upped their offer from $63.00 to $64.25 per share. That translates to a market value of roughly $1.7 billion (including the assumption of $475 million in debt). It's also the "best and final offer."
Lately, hedge funds have been getting more aggressive on buyout scenarios. By purchasing big positions in the stock, they can exert lots of power on a deal. And that appears to be the case with Genesis.
On the news, the stock price is up $0.22 to $63.34.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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