BEI and Formation Capital call it quits in proxy fight
The Formation Capital investors group has agreed to end its proxy contest with nursing home giant BEI, the embattled chain said Tuesday.
Both entities signed a confidentiality agreement under which the investors group would be included among other potential buyers in the auction of BEI. The chain, which until recently called itself Beverly Enterprises Inc., recently said it has already received interest from more than a dozen possible buyers.
The Fort Smith, AR-based company put itself up for auction last month after conceding it likely would not win the proxy battle at its April 21 annual meeting. It had been fending off a hostile takeover attempt by Formation Capital since January, when that group offered to purchase BEI for about $1.5 billion, of $11.50 a share. BEI declined the offer and Formation proceeded to nominate its own slate of directors.
Both parties sent out proxy letters to shareholders asking them to vote for their respective boards, but BEI later determined that there was so much turnover in its shareholder base since the hostile takeover bid, it would probably lose the proxy fight. The new stockholders were more interested in a short-term profit from a company sale, BEI officials said. BEI shares traded at $12.25 Tuesday.