Beverly's fate in doubt as proxy election nears

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The niceties long dispensed with, Beverly Enterprises' top management is campaigning against an unwelcome but persistent suitor. The Fort Smith, AR-based nursing home giant recently rejected a $1.5 billion bid from an investment group led by Formation Capital LLC. But the matter is hardly resolved.

The battle over the company's future now shifts to an April 21 board election. Formation will field candidates for six of the eight available board positions. Beverly has hired investment banking firm Lehman Brothers and other negotiators to fend off the possible overthrow.
"We have a team that is dedicated to winning, has a long track record of success -- and knows how to play this game very well," said Bill Floyd, Beverly's CEO. Formation appears just as determined to win over stockholders, which are dominated by institutional investors.
In rejecting Formation's initial offer, Floyd described it as highly leveraged and designed to make a quick profit. Formation -- along with Appaloosa Management LP, Franklin Mutual Advisors, and Northbrook NBV LLC - announced its $11.50-per-share takeover offer in January. The investor group is led by Formation CEO Arnold Whitman – and currently owns about 8% percent of Beverly's stock.