GEN Acquisition accepts tenders for all Genesis 8% notes, 2.5% convertibles

By Jennifer Chiou

New York, July 13 - GEN Acquisition Corp. said it accepted all notes in its tender offer for Genesis Healthcare Corp.'s 8% senior subordinated notes due 2013 and 2.5% convertible senior subordinated debentures due 2025.

The offer expired at 5 p.m. ET on July 12, extended from 5 p.m. ET on July 11. It began on June 7.

The company extended the tender offer to coordinate the expiration with the closing of the acquisition on Friday, which was a condition to the tender offers. GEN Acquisition had previously said it received tenders from holders of all of both the 8% notes and the 2.5% notes.

On June 20, GEN Acquisition said it 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 paid $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 paid $1,407.16.

GEN Acquisition also paid accrued interest up to but excluding the payment date.

Those who tendered by the consent deadline received 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 tender is conditioned upon necessary financing and the receipt of the required consents.

The offer was 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 merged with and into Genesis, with Genesis being the surviving corporation.

UBS Investment Bank was the dealer manager (888 722-9555, x4210 or call collect 203 719-4210). Innisfree M&A Inc. was 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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