BEI suitor files complaint to new nursing home bill
Formation Capital LLC, a bidder for BEI, the Fort Smith, AR-based nursing home chain, filed a complaint this week in response to a bill in the Arkansas legislature that would help protect nursing home residents in the event of a takeover.
The complaint was filed in U.S. District Court in the Eastern District of Arkansas. It contends that the "Long Term Care Resident Protection Act of 2005" should be declared unconstitutional. The bill does not protect residents as it says it will, but is instead aimed at protecting the senior officers of BEI, formerly Beverly Enterprises Inc., according to the complaint. A House panel passed the bill last week.
"We believe the proposed Long Term Care Act is simply a last-ditch effort by the Beverly Board and management to resist our consortium's offer -- an offer which would provide superior value to all Beverly shareholders," said Arnold M. Whitman, Formation Capital's CEO.
Formation and its partners, Appaloosa Management LP and Franklin Mutual Advisors LLC, filed a letter with the Securities and Exchange Commission in January, noting their offer to buy BEI for $1.5 billion. BEI subsequently rejected the offer.