Brigade Capital Management, the holder of a 5.8 percent stake in Kindred Healthcare Inc., said it opposes a takeover of the medical-facility operator by a group of investors including health insurer Humana Inc., because the price is too low.
Humana and private equity firms TPG Capital and Welsh Carson Anderson & Stowe agreed to buy Kindred for $9 a share on Dec. 19. Kindred's shares closed at $8.60 on Dec. 15, the last trading day before reports emerged of the potential deal, and had risen as high as $11.70 earlier this year.
The $9-a-share offer is "grossly inadequate" and doesn't account for efforts Kindred has made to improve operations, Brigade said in a letter to Kindred's chief executive officer. Kindred should remain an independent firm, at least until the turnaround effort can take hold, the investor said.
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"The deal price is not reflective of Kindred's intrinsic value and will short-change existing shareholders," Donald Morgan, managing partner at Brigade, wrote in the letter. "There is no urgency to sell the company, and conducting a sale process utilizing Kindred's significantly distorted trailing twelve month performance seems particularly misguided."
Kindred's shares rose 1.3 percent to $9.53 at 11:31 a.m. in New York on Wednesday.
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