Kindred Healthcare faces lawsuit over proposed sale to Humana, private equity
Louisville-based Kindred Healthcare has provided “incomplete and misleading” information to investors about the proposed sale of the company to Humana Inc. and two private equity firms, according to a lawsuit that seeks to stop the merger in its tracks.
LOUISVILLE, Ky. (WDRB) -- Louisville-based Kindred Healthcare has provided “incomplete and misleading” information to investors about the proposed sale of the company to Humana Inc. and two private equity firms, according to a lawsuit that seeks to stop the merger in its tracks.
Mazy Sehrgosha, a Kindred shareholder, filed the lawsuit in federal court in Delaware on Thursday, according to court records.
Sehrgosha asks for class-action status to represent all Kindred stockholders and for a judge to block the sale, which the companies hope to close this year.
A Kindred spokeswoman did not immediately respond to a request for comment.
Kindred announced Dec. 19 that it had agreed to a buyout by Humana, also based in Louisville, and private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe. The $9 per share price values the company at a little more than $780 million.
Kindred, one of three Fortune 500 companies based in Louisville, would be split up and taken private in the deal.
Its home-based care division would be folded into Humana, while the surviving Kindred Healthcare would be a specialty hospital company owned by the private equity firms.
One big Kindred investor, New York-based Brigade Capital Management, has already said the deal price shortchanges Kindred stockholders.
Kindred shareholders must vote on the proposed sale in a special meeting that hasn’t been scheduled.
No other information about Sehrgosha is disclosed in the lawsuit. He is the only plaintiff named.
The lawsuit finds fault in a 300-page document Kindred filed last week, in which the company explains why its board of directors favors the sale and the alternatives the board evaluated.
Kindred’s so-called proxy statement failed to disclose key financial information about the company, according to the lawsuit.
The $9-per-share price is also “inadequate,” according to the lawsuit.