Kindred Healthcare sets March 29 vote on controversial sale to Humana, private equity
Shareholders of Louisville-based Kindred Healthcare will vote on the company’s controversial proposal to be sold to Humana Inc. and two private equity firms at a special meeting on March 29, Kindred said in a regulatory filing Wednesday.
LOUISVILLE, Ky. (WDRB) -- Shareholders of Louisville-based Kindred Healthcare will vote on the company’s controversial proposal to be sold to Humana Inc. and two private equity firms at a special meeting on March 29, Kindred said in a regulatory filing Wednesday.
Shareholder approval is a key step in completing the sale as planned this summer – a deal that some Kindred investors have denounced as unfair to the company.
Under a proposal announced in December, Humana and the private equity firms -- TPG Capital (“TPG”), Welsh, Carson, Anderson & Stowe – would pay $9 per share, or about $780 million, for Kindred.
Kindred’s stock traded at $8.60 per share in mid-December, just before news of the forthcoming sale was reported by The Wall Street Journal.
In documents filed Wednesday, Kindred defended the sale, saying its stock price has been “depressed and volatile” despite actions to shore up the company’s finances, like the recent sale of hundreds of skilled nursing facilities.
Kindred also cited its high debt load of more than $3 billion and its expectation that ballooning federal debt created by the Republican-led tax cut bill will lead to cuts in Medicare and Medicaid, the government programs that make up a large chunk of Kindred’s revenue.
“In light of the challenging operating, reimbursement and regulatory environment and the unique dynamics for each of Kindred’s businesses, the Kindred Board strongly believes that now is the right time to consummate a transaction,” said Phyllis R. Yale, chairwoman of Kindred’s board of directors, in a letter to stockholders.
But one big Kindred shareholder has said the company picked a “terrible time” to sell and that Humana and the private equity firms, not Kindred’s stockholders, will realize the inherent value of the company.
Kindred also faces at least five lawsuits, each seeking class-action status, in which shareholder plaintiffs seek to block the deal, according to federal court records.
Under the deal, Kindred would cease being a publicly traded company and be split into a specialty hospital company owned by the private equity firms and a home-care company which Humana would eventually own outright.
The March 29 shareholder meeting will be at Kindred’s Louisville headquarters, 680 S. 4th Street, at 10 a.m.