Employees, investors ponder fate after $1.9 Beverly deal announced

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A group of investors that recently had a hand in the purchase of two other giant nursing home chains has apparently won the bidding for Beverly Enterprises. The nation's once-largest nursing home chain announced a $1.9 billion cash deal early Wednesday. It had put itself up for auction in March amid a hostile takeover bid.

When workers at Beverly headquarters in Fort Smith, AR, were informed of the deal by management early Wednesday, they were told their jobs were secure. A spokesman for the buyer, North American Senior Care, said Beverly headquarters would not be moved and that it intended to retain the company's senior services divisions.

The acquirer, which did not reveal its sponsors, was reportedly instrumental in the privatization of massive Mariner Health Care last year, and the purchase of the remnants of the Integrated Health Services chain before that. Published accounts said North American had more than 400 facilities before landing the winning bid for Beverly's 345 nursing homes, plus its various other facilities and service divisions.

The $12.80 per share purchase price of Beverly (officially BEI since earlier this year) was higher than the unsolicited $11.50 offer by Formation Capital earlier this year. But it clearly was not as much as some shareholders, who still must approve the deal, were hoping for. Regulators also must approve.

"One would argue that [$12.80 a share] doesn't look like full value, but that's a very perfunctory analysis," said James Kumpel, analyst for Friedman, Billings, Ramsey in a MarketWatch report. Beverly officials said 10 of 47 companies contacted submitted initial bids. They said the deal was expected to close early next year.