Beverly adopts "poison pill" strategy, will respond to takeover bid by Friday
Beverly Enterprises Inc. (BEI) has adopted a "poison pill" strategy following a breakdown in negotiations with Formation Capital LLC, an investor group interested in purchasing the mammoth nursing home chain. CEO and Chairman William R. Floyd notified BEI employees of the tactic last week.
The "poison pill"/shareholders' rights provision prevents any investor or group of investors from acquiring more than 10% of its stock. Floyd also said the Fort Smith, AR-based company would move up the date of the company's annual meeting in an effort to ward off any takeover attempt.
Floyd said in a teleconference to employees that members of the BEI board of directors plan to issue a response to the takeover bid by Friday. He called Formation Capital's pursuit of purchasing individual shareholders' stock and its publicly releasing details of purchase negotiations "hardball."
Formation Capital has offered $11.50 a share, or about $1.5 billion to purchase BEI's skilled-nursing facilities.