Accipiter Capital reaches out to VistaCare shareholders, believes Odyssey Healthcare could increase offer

By Lisa Kerner

Charlotte, N.C., Feb. 27 - Accipiter Capital Management said it believes VistaCare, Inc.'s board of directors is selling the company at a discount to Odyssey Healthcare, Inc. following the investor's meeting with Odyssey's senior management.

In a Feb. 26 letter to VistaCare's board, Accipiter and its affiliates, with a 10% stake in the company, said they will not tender their shares in connection with the acquisition and urged VistaCare shareholders to do the same.

Odyssey's tender offer for VistaCare was slated to end at midnight ET on Wednesday.

The investor believes that if enough VistaCare shareholders fail to tender their shares, Odyssey would come back with an offer that better reflects the company's fair value.

However, Odyssey president and chief executive officer Robert Lefton said in a separate statement that $8.60 per share is the company's best and final offer based on Odyssey's "extensive due diligence."

According to Accipiter's letter, Odyssey does not believe that VistaCare shareholders deserve value for most of VistaCare's "substantial cash balance," citing merger-related severance payments to be made to VistaCare senior management as well as integration and transaction expenses.

Accipiter argued that shareholders will also not receive any value "for the significant synergies to be achieved as a result of the geographic overlap and considerable corporate overhead expense" at VistaCare.

It was previously reported that Odyssey offered to acquire VistaCare for $8.60 per share, or $147.1 million, in a deal Accipiter called "wholly inadequate." Accipiter suggested that the company could be valued at $11.50 per share.

Both VistaCare and Odyssey are hospice care providers. VistaCare is located in Scottsdale, Ariz., and Odyssey is based in Dallas.

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