Beverly suitor fumes over rejected offer, nominates own board of directors

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The intensity of the attempted hostile takeover of nursing home giant Beverly Enterprises Inc. (BEI) has soared to new levels, with its rejected suitor submitting its own slate for election to the Beverly board of directors. Formation Capital LLC submitted the six names Friday after sending a blistering letter to Beverly CEO Bill Floyd, accusing him of misrepresenting details of the proposed $1.5 billion deal.

Floyd's rejection letter Thursday was "disingenuous and misleading, and it underscores your entrenched position and attempt to thwart a very attractive proposal that will benefit your Company and all of its shareholders," wrote Formation Capital CEO Arnold Whitman in a filing Friday with the Securities and Exchange Commission. Floyd declined comment Friday on the company's next course of action.

Formation Capital filed documents with the SEC last month saying it had offered Beverly $11.50 per share, or $1.5 billion for the Fort Smith, AR-based nursing home chain. That included $1.2 billion for its nursing homes. Formation Capital, which includes Appaloosa Management LP, Franklin Mutual Advisors LLC and Northbrook NBV LLC, owns 8% of the company.

Formation's nominees for the Beverly board are: Jeffrey A. Brodsky, managing director of Quest Turnaround Advisors LLC; John Durso, a partner with the Chicago office of the law firm, Michael Best & Friedrich LLP; Philip L. Maslowe, director of NorthWestern Corp; Charles M. Masson, a managing partner of Masson & Company LLC; Mohsin Y. Meghji, a principal of Loughlin Meghji and Co.; and Guy Sansone of Alvarez & Marsal LLC. A board member election will be held at Beverly's annual meeting April 21.

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