Updated from 12:03 p.m. EDT
, one of the largest operators of nursing homes in the U.S., moved closer to an expansion into the home health care business Tuesday with an offer to acquire the 38.6% of
In Home Health
that it does not already own.
Manor Care has been seeking to acquire all of the Minnetonka, Minn.-based company for more than a month and now owns about 61.4% of its 5.53 million shares. Under the terms of its offer announced Tuesday, the Toledo, Ohio-based company said it would pay $3.375 a share, or about $7.2 million, for the rest, a 71% premium over In Home Health's closing price May 31, the day before Manor Care's intentions were disclosed.
In the past two weeks, Manor Care has also paid that price for shares owned by In Home Health's next three largest shareholders:
RS Value Group
Eastbourne Capital Management
. On June 28, Manor Care paid $1.5 million for Heartland's 454,401 shares of In Home Health. On June 29, Manor Care paid $1.6 million for RS Value Group's 461,734 shares, as well as $778,275 for hedge fund Eastbourne's 230,600 shares.
"We have been a significant shareholder in the company since 1995," said Geoffrey Meyers, chief financial officer of Manor Care, in an interview. "We want to take a more active role in the management of this business."
Except for the merger in 1998 between Manor Care and
Health Care and Retirement
, Manor Care has not grown through acquisitions. Its strategy of keeping costs low and concentrating in relatively affluent areas has helped keep the company financially strong, unlike many of its highly indebted competitors. Manor care is considered one of the few good investment plays in the
Even so, shares of Manor Care have suffered in the selloff of nursing home stocks. Down 65% in the past 12 months, the stock closed Tuesday regular trading down 1/16, or 0.9%, at 7 1/4.
Meanwhile, shares of In Home Health finished up 1/4, or 8%, at 3 1/4.