Hedge Fund Reader : Beverly Enterprises seams to be drawing interest from Hedge Funds

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August 26, 2005

Beverly Enterprises seams to be drawing interest from Hedge Funds

The battle heated up for grabbing Beverly Enterprises Inc., based in Fort Smith, Arkansas, the second-largest U.S. operator of nursing homes. The new bid offered is $1.64 billion per share amounting to $12.90 a share from hedge funds Formation Capital, Franklin Mutual Advisers, Northbrook NBV and Appaloosa Management. North American Senior Care, Inc. had previously offered $12.80 per share for and aggregate of $1.63 billion and assumption of $224 million debt for Beverly. Beverly Enterprises ranks behind the Ohio-based Toledowith 345 nursing homes, 64 hospice and home care-centers, and 18 assisted-living units. The four hedge funds intent breaking-up the company, although, North American has agreed to keep the company and its management intact. Experts claim that the company can derive a better value in parts than as a whole. Startribune.com Reports:

The hedge funds' bid escalates a battle over Beverly that Appaloosa and its partners started in January with a $1.4 billion offer. Legg Mason analyst Jerry Doctrow suggested in a note Friday that the company's "value could be maximized by breaking the company up." The North American group agreed to keep the company and its management intact, Beverly said.