Genesis HealthCare urges buyout approval

Nursing home operator Genesis HealthCare Corp. of Kennett Square today sent a letter to shareholders urging approval of the pending $1.25 billion acquisition of the company.

Private equity firms Formation Capital LLC and JER Partners have offered $63 per share in cash for Genesis stock. The letter to shareholders comes in advance of the company's April 19 annual meeting, when a vote on the buyout is set.

If approved, the deal is expected to close in as early as July.

The buyout firms' offer is a 31 percent premium over the average closing price for the 30 days prior to Jan. 16, when the deal was announced, today's letter said.

"There is substantial risk to the value of your shares if the transaction is not approved," the letter warned.

Genesis shares were down 6 cents, to $63.20 in midday trading today on the Nasdaq market.

Genesis operates in 13 states and employs 34,600 workers. About three-quarters of its beds are in Pennsylvania, New Jersey, Maryland and Massachusetts.

In the Philadelphia area, including South Jersey, Genesis operates 21 nursing homes and assisted-living centers, employing 5,000.

Formation Capital, which is based in Georgia and has an office in Jenkintown, invests in senior housing and the health-care industry.

JER is the investment arm of the J.E. Robert Cos., of McLean, Va.