The bidding wars for logistics company EGL Inc. and nursing home operator
Genesis HealthCare Corp. have run on remarkably parallel courses for two
months. In both cases, as soon as a deal was announced in March, a frustrated
bidder came forth to complain that it had been shut out of the sale process.
In both cases, the gate crashers ultimately sued over the process and tabled
spoiler bids. In both cases, the outsiders were private equity firms that
already owned similar companies and expect to realize synergies by merging
their existing companies with EGL and Genesis, respectively.
Last week both situations were in a similar posture again, with the spoiler
bidders appearing to have prevailed over the buyers the companies had appeared
to have preferred.
At the close of the market Friday, Apollo Management LP and its portfolio
company Ceva Group plc seemed to have EGL in the bag. The day before, EGL said
that its original buyers, EGL chairman and CEO James Crane and backers
Centerbridge Partners LP and the Woodbridge Co. Ltd., hadn’t matched Ceva’s
last offer of $46 per share within the four-day window they were allowed under
their take-private agreement with the company. The stock, which had closed
above $46 on Wednesday on hopes of a new bid, slumped below $45 Thursday on
that news.
Friday night EGL disclosed that Crane’s group was now offering $46.25 per
share. However, Crane’s new lead didn’t last long. This morning, EGL said that
Ceva had upped the ante again—to $47.50.
Similarly, over at Genesis, Formation Capital LLC and JER Partners seemed to
drop by the wayside late last week in the face of a $69.25 per share offer
from Fillmore Partners LP, after the Genesis special committee said last week
that the Fillmore had the best offer on the table. Nothing had been heard from
Formation and JER since the board made that finding.
But Genesis said this morning that it had accepted a new offer from Formation
and JER that topped the Fillmore bid by 10 cents per share, at $69.35, plus
interest from July 31 if the deal hasn’t closed by then
The question now is whether Fillmore will follow the script written by Apollo
and Ceva and top the latest Formation-JER bid. Investors seemed unsure.
Genesis shares edged up only .5%, to $68.61 Monday morning, still well under
Formation-JER’s price.—John E. Morris
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