Kindred Healthcare faces lawsuit over proposed sale to Humana, p - WDRB 41 Louisville News

Kindred Healthcare faces lawsuit over proposed sale to Humana, private equity

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Kindred Healthcare's headquarters in downtown Louisville Kindred Healthcare's headquarters in downtown Louisville

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.  

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2018 WDRB News. All rights reserved.

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