GEN Acquisition gets necessary consents for Genesis HealthCare's 8% notes, 2.5% convertibles

By Jennifer Chiou

New York, June 21 - GEN Acquisition Corp. announced that it received tenders for more than 99.5% of Genesis HealthCare Corp.'s 8% senior subordinated notes due 2013 and more than 99.9% of the 2.5% convertible senior subordinated debentures due 2025 as of the consent deadline of midnight ET on June 20.

The company obtained the required consents to eliminate most of the restrictive covenants in the note indentures and said that it has executed supplemental indentures.

For each $1,000 principal amount of 8% notes, the company will pay $1,066.66, which was determined using the yield to the first redemption date equal to the sum of the bid-side yield of the 3 1/8% Treasury due Oct. 15, 2008 and 50 basis points. The reference yield was 5.071%, and the tender offer yield was 5.571%.

For each $1,000 principal amount of 2.5% notes, the company will pay $1,407.16.

GEN Acquisition will pay accrued interest up to but excluding the payment date.

Those who tendered by the consent deadline will receive the consent payment of $2.50 for the 2.5% notes and $20.00 for the 8% notes, which is included in the consideration.

The offer ends at midnight ET on July 5. It began on June 7.

The tender is conditioned upon necessary financing and the receipt of the required consents.

The offer is linked to a plan of merger dated Jan. 15 among Genesis, GEN Acquisition and GEN Acquisition's parent, FC-GEN Acquisition, Inc. Under the agreement, GEN Acquisition will merge with and into Genesis, with Genesis being the surviving corporation.

UBS Investment Bank is the dealer manager (888 722-9555, x4210 or call collect 203 719-4210). Innisfree M&A Inc. is the information agent (888 750-5834 or call collect 212 750-5833).

GEN Acquisition and FC-GEN are owned by affiliates of Formation Capital, LLC and affiliates of JER Partners, which is the private equity investment group affiliated with J.E. Robert Co., Inc.

Genesis is a Kennett Square, Pa.-based provider of long-term care services and centers.

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