August 26, 2005

Beverly Enterprises seams to be drawing interest from Hedge Funds

The battle heated up for grabbing Beverly Enterprises Inc., based in Fort Smith, Arkansas, the second-largest U.S. operator of nursing homes. The new bid offered is $1.64 billion per share amounting to $12.90 a share from hedge funds Formation Capital, Franklin Mutual Advisers, Northbrook NBV and Appaloosa Management. North American Senior Care, Inc. had previously offered $12.80 per share for and aggregate of $1.63 billion and assumption of $224 million debt for Beverly. Beverly Enterprises ranks behind the Ohio-based Toledowith 345 nursing homes, 64 hospice and home care-centers, and 18 assisted-living units. The four hedge funds intent breaking-up the company, although, North American has agreed to keep the company and its management intact. Experts claim that the company can derive a better value in parts than as a whole. Reports:

The hedge funds' bid escalates a battle over Beverly that Appaloosa and its partners started in January with a $1.4 billion offer. Legg Mason analyst Jerry Doctrow suggested in a note Friday that the company's "value could be maximized by breaking the company up." The North American group agreed to keep the company and its management intact, Beverly said.

Read More: Hedge funds raise bid for nursing home firm Beverly Enterprises

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