Beverly Enterprises tenders for 9 5/8% notes

New York, June 9 - Beverly Enterprises Inc. (B1/B+) said it has begun a cash tender offer for any and all of the $200 million principal amount of its outstanding 9 5/8% senior notes due 2009 and is also soliciting consents to proposed changes in the notes' indenture.

The company set a consent deadline of 5 p.m. ET on June 17 and said the offer would expire at 11:59 p.m. ET on July 8, with both deadlines subject to possible extension.

Beverly, a Fort Smith, Ark.-based operator of nursing homes and assisted living centers, said it would offer total consideration equal to 119% of the principal amount of notes validly tendered and accepted for purchase by the company to those holders tendering their notes by the consent deadline and thus, consenting to the proposed indenture changes. Holders tendering their notes after the consent deadline but before the offer expires would receive 116% of the principal amount but will not receive the extra 3%, which is a consent payment for holders tendering by the consent deadline.

All tendering holders will also receive accrued and unpaid interest up to, but not including, the payment date.

Beverly said the offer and consent solicitation is conditioned upon the receipt by the company of required consent to the indenture changes, a financing condition, and a bank condition.

Beverly already has received written commitments to tender and consent from holders of 48% of the notes.

The company said it intends to finance this offer and consent solicitation primarily with net proceeds from a 10-year senior subordinated note financing of up to $225 million principal amount that it expects to offer later this month. The tender premium, plus transaction-related costs, will result in a special pre-tax charge totaling about $43 million if all the notes are tendered and accepted for payment, which is expected to be recorded primarily during the 2004 second quarter. After the initial charge related to the tender offer, the financing transaction is expected to be accretive to earnings per share.

Beverly has retained Lehman Brothers to serve as the dealer manager and solicitation agent (call the Liability Management Group at 212 528-7581 or 800 438-3242). D.F. King & Co. Inc. is the information agent for the offer (call 212 269-5550 or 800 431-9643).

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