-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TpmINm0/MJz/Pibk15nCHhcBVv/xjmM4uGvVdOvJir7cLZuLFW38+KuHq5rAX2xg /OhWt+Qy11HLYjwBZPEn1w== 0000950137-98-002516.txt : 19980617 0000950137-98-002516.hdr.sgml : 19980617 ACCESSION NUMBER: 0000950137-98-002516 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980610 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980616 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTH CARE & RETIREMENT CORP / DE CENTRAL INDEX KEY: 0000878736 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 341687107 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10858 FILM NUMBER: 98649228 BUSINESS ADDRESS: STREET 1: ONE SEAGATE CITY: TOLEDO STATE: OH ZIP: 43604-2616 BUSINESS PHONE: 4192525500 MAIL ADDRESS: STREET 1: ONE SEAGATE CITY: TOLEDO STATE: OH ZIP: 43604-2616 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 10, 1998 HEALTH CARE AND RETIREMENT CORPORATION (Exact name of registrant as specified in charter) Delaware 0-10858 34-1687107 (State or other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) One SeaGate 43604-2616 Toledo, Ohio (Zip Code) (Address of Principal Executive Offices) Registrant's telephone number, including area code: (419) 252-5500 2 Item 5. Other Events. Manor Care, Inc., a Delaware corporation ("Manor Care"), Health Care and Retirement Corporation ("HCR") and Catera Acquisition Corporation, a Delaware corporation ("Merger Sub"), have signed an Agreement and Plan of Merger dated as of June 10, 1998 (the "Merger Agreement") which provides for the merger of Merger Sub with and into Manor Care, whereby the separate corporate existence of Merger Sub will cease and Manor Care will continue as a wholly owned subsidiary of HCR (the "Merger"). Following the Merger, HCR will be renamed HCR Manor Care for a period of one year and, thereafter, Manor Care unless such name is changed by a resolution of its Board of Directors. The Merger Agreement provides that, with certain limited exceptions, the owner of each issued and outstanding share of Manor Care common stock, par value $.10 per share shall be converted into the right to receive one (1.0) share of HCR common stock, par value $ .01 per share. Upon completion of the transaction, Manor Care will be a wholly owned subsidiary of HCR and the stockholders of Manor Care will become stockholders of HCR. The merger is subject to certain conditions, including the approval of HCR's shareholders at a special meeting to be held as soon as practicable, the receipt of certain regulatory approvals and the expiration of antitrust regulatory waiting periods. In connection with the execution and delivery of the Merger Agreement and the transactions contemplated thereby, the Board of Directors of HCR authorized the execution and delivery of an amendment, dated as of June 10, 1998, to HCR's Rights Agreement dated as of May 2, 1995, as amended, which is filed herewith as Exhibit 4.3. HCR has issued a press release announcing the execution of the Merger Agreement, which is filed herewith as Exhibit 99.1. 3 Item 7. Financial Statements and Exhibits. (c) The following exhibits are filed with this report: 4.3 Rights Amendment dated as of June 10, 1998 between Health Care and Retirement Corporation and Harris Trust and Savings Bank 99.1 Press Release dated June 10, 1998 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HEALTH CARE AND RETIREMENT CORPORATION Date: June 16, 1998 By: /s/ R. Jeffrey Bixler --------------------- Vice President, General Counsel EX-4.3 2 HEALTH CARE & RETIREMENT CORP. RIGHTS AMEND. 1 Exhibit 4.3 HEALTH CARE AND RETIREMENT CORPORATION RIGHTS AMENDMENT AMENDMENT, dated as of June 10, 1998 (this "Amendment"), to the Rights Agreement, dated as of May 2, 1995 (the "Rights Agreement"), between HEALTH CARE AND RETIREMENT CORPORATION, a Delaware corporation (the "Company"), and HARRIS TRUST AND SAVINGS BANK (the "Rights Agent"). The Company and the Rights Agent have heretofore executed and entered into the Rights Agreement. Pursuant to Section 26 of the Rights Agreement, the Company and the Rights Agent may from time to time supplement or amend the Rights Agreement in accordance with the provisions of Section 26 thereof. All acts and things necessary to make this Amendment a valid agreement according to its terms have been done and performed, and the execution and delivery of this Agreement by the Company and the Rights Agent have been in all respects authorized by the Company and the Rights Agent. In consideration of the foregoing premises and mutual agreements set forth in the Rights Agreement and this Amendment, the parties hereto agree as follows: I. The first sentence of Section 1.1 of the Rights Agreement is hereby modified and amended to read in its entirety as follows: "Acquiring Person" shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the Common Shares of the Company then outstanding, but shall not include (i) the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the Company, (iii) any employee benefit plan of the Company or any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan, (iv) Stewart Bainum or his spouse or widow, their lineal descendants or their spouses or widows or widowers (for so long as they remain spouses) (each a "Member of the Bainum Family"), or the estate of any of the foregoing persons (but only until such time as the Common Shares are distributed therefrom), (v) any partnership, trust, corporation or other entity (each, an "Entity"), but only if a Member or Members of the Bainum Family or another Entity satisfying the requirements hereof are the sole Beneficial Owners of the Common Shares held by such Entity, other than any officer, trustee, director, or other managing person or managing partner or managing member of any such Entity to the extent any such person is deemed to be the Beneficial Owner of Common Shares held by such Entity, provided such person is not the Beneficial Owner, other than through an Entity 2 described in this clause (v), of in excess of 1% of the total outstanding Common Shares; or (vi) any transferee of a person described in clause (iv) or (v) so long as such transferee will not, after giving effect to such transfer, be the Beneficial Owner of more than 20% of the Common Shares of the Company; provided, however, that no Member of the Bainum Family will be excepted from this definition of "Acquiring Person" in the event that any such Member of the Bainum Family or any such estate or Entity, or all of them in the aggregate (A) prior to the Effective Time of the "Merger" (as defined in the Agreement and Plan of Merger, dated as of June 10, 1998, among the Company, Catera Acquisition Corp. and Manor Care, Inc. (the "Merger Agreement"), becomes the Beneficial Owner of Common Shares of the Company other than pursuant to the terms of the HCR Stock Option and (B) after the Effective Time, becomes the Beneficial Owner of 20.0% or more of the Common Shares of the Company other than pursuant to an excepted transaction described in the next sentence." I. Section 3.1 of the Rights Agreement is hereby amended by adding as the final sentence thereto the following: "Notwithstanding anything in this Agreement to the contrary, a Distribution Date shall not be deemed to have occurred solely as a result of (i) the approval, execution and delivery of the Merger Agreement or the Ancillary Agreements (as defined in the Merger Agreement), or (ii) the consummation of the Merger (as defined in the Merger Agreement) or the other transactions contemplated thereby or the exercise of the HCR Option (as defined in the Merger Agreement)." 3. Section 13.1 of the Rights Agreement is hereby amended by adding as the final sentence thereto the following: "Notwithstanding anything in this Agreement to the contrary, a transaction of the kind referred to in this Section 13.1 shall not be deemed to have occurred solely as a result of (i) the approval, execution and delivery of the Merger Agreement or the Ancillary Agreements (as defined in the Merger Agreement), or (ii) the consummation of the Merger (as defined in the Merger Agreement) or the other transactions contemplated thereby or the exercise of the HCR Option (as defined in the Merger Agreement)." 4. Each of Section 7.1 or 13.2 of the Rights Agreement is hereby amended by adding the following proviso: "; provided, however, none of the Merger, the Merger Agreement, the Ancillary Agreements or the transaction contemplated by any of such agreements shall be subject to this Section. 5. Except as expressly amended hereby, the Rights Agreement remains in full force and effect in accordance with its terms. 3 6. The Rights Agreement, as amended by this Amendment, and each Right and each Rights Certificate exist under and pursuant to the Delaware General Corporation Law. 7. This Amendment to the Rights Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. 8. This Amendment to the Rights Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed an original, and all such counterparts shall together constitute but one and the same instrument. 9. Except as expressly set forth herein, this Amendment to the Rights Agreement shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Rights Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. 4 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the Rights Agreement to be duly executed as of the day and year first above written. HEALTH CARE AND RETIREMENT CORPORATION By: ---------------------------- Title: HARRIS TRUST AND SAVINGS BANK By: ---------------------------- Title: EX-99.1 3 PRESS RELEASE DATED 6/10/98 1 Exhibit 99.1 HEALTH CARE AND RETIREMENT CORPORATION AND MANOR CARE TO COMBINE IN $5 BILLION MERGER TO CREATE NATION'S LEADING LONG-TERM HEALTH CARE SERVICES COMPANY - - COMBINATION OF TWO PREMIER COMPANIES TO RESULT IN ENHANCED GROWTH PROSPECTS AND PROFITABILITY - - - NEW COMPANY TO HAVE EXCEPTIONAL FINANCIAL AND GEOGRAPHIC STRENGTH - TOLEDO, Ohio and GAITHERSBURG, Md., June 10 /PRNewswire/ -- Health Care and Retirement Corporation (NYSE: HCR - news) and Manor Care Inc. (NYSE: MNR - news) today jointly announced a definitive agreement to merge the two companies in an exchange of shares, in a transaction valued at approximately $5 billion, including the assumption of debt. The combined company, which will be known as HCR Manor Care, will unite two of the nation's leaders in the long-term health care services industry. It will create the largest and most profitable company in its industry, exceptionally well positioned to capitalize on new growth opportunities. Under the terms of the agreement, each share of Manor Care will be exchanged for one share of HCR. The transaction is expected to be immediately accretive to HCR's earnings and to be taxfree to Manor Care's shareholders. It will be accounted for as a pooling of interests. The transaction has been approved by the Boards of Directors of both companies, and requires the approval of the shareholders of both companies, as well as customary regulatory approval. The Bainum family, which holds approximately 31% of the shares of Manor Care, has agreed to vote its shares in favor of the transaction. The transaction is expected to be completed during the fourth quarter. Headquarters of HCR Manor Care will be located in Toledo, Ohio. The Board of Directors of the combined company will have equal representation from both HCR and Manor Care. Stewart Bainum, Jr., Chairman and Chief Executive Officer of Manor Care, will become Chairman of the combined company, and Paul A. Ormond, Chairman, President and Chief Executive Officer of HCR, will be President and Chief Executive Officer. Additionally, M. Keith Weikel, Senior Executive Vice President and Chief Operating Officer of HCR, and Geoffrey G. Meyers, Executive Vice President and Chief Financial Officer of HCR, will maintain their respective positions after the combination. Joseph R. Buckley, Executive Vice President of Manor Care, will continue as Executive Vice President in the combined company. As a result of the combination, the planned separation of Manor Care, Inc. into a health care services management company and a health care real estate and development company will be canceled. 2 Mr. Ormond said, "The combination of these two preeminent long-term care providers will create an important new force in the industry, with increased growth potential from an already rapidly growing base. The combination of our two companies will enhance our ability to offer superior and innovative patient services at a time when the long-term care industry is both growing and consolidating." Mr. Bainum said, "The merger of HCR and Manor Care brings together two companies with similar philosophies and characteristics. I am pleased that we will be gaining the additional talents of the HCR management team, which has achieved such an outstanding record of success and in which I have full confidence. By combining, we will be able to make optimal use of our top- quality assets, and continue to attract the best people in the industry. Together, we will be the premier long-term care company in the United States in terms of facilities and capabilities, as well as the most profitable and the largest in terms of market capitalization. "By combining our strong financial positions, we will create a company with a very solid balance sheet and an equity market capitalization of approximately $4 billion, less than $1 billion of debt, and total revenues of $2.4 billion. This financial strength will enable us to take advantage of greater expansion opportunities, both through an aggressive internal facilities development program and through future acquisitions, at the lowest cost of capital in the industry." Mr. Ormond stated, "Moreover, the merger will combine the best practices of the best companies in the industry. HCR will bring its proven record for generating consistent revenue and earnings growth, which has exceeded 20% in each year since going public in 1991, and its strong operating expertise. Manor Care will bring its top-notch facilities and its reputation for high-quality, innovative services, including its rapidly growing Arden Court assisted living facilities which specialize in the care of individuals with Alzheimer's disease. "Together, we will have a large percentage of high-quality revenues and a strong geographic presence, especially in several states with particularly attractive market dynamics, such as Ohio, Pennsylvania, Michigan, Illinois and Florida. The combination will also improve our ability to negotiate effectively with managed care providers," Mr. Ormond concluded. Within the first full year of operations, the combined company expects to realize at least $30 million of cost savings in addition to the earnings enhancements generated by the combination. In total, HCR has 124 long term care centers, 76 outpatient therapy clinics, 116 subacute and rehabilitation units, 5 assisted living centers, 33 home health offices, and a national pharmacy with 4 locations. Manor Care operates 171 skilled nursing and rehabilitation facilities, 42 assisted living centers and one acute care hospital. Manor Care currently operates 213 health care facilities containing 28,300 beds in 29 states. Manor Care also owns approximately 50% of Vitalink Pharmacy Services (NYSE: VTK - news) and holds a controlling interest in In-Home Health, Inc. (Nasdaq: IHHI - news). HCR, headquartered in Toledo, Ohio, now has more than 22,000 employees providing high-quality care through a network of long-term care centers, outpatient rehabilitation clinics, home 3 health care offices, and management service for professional organizations. In 1997, HCR reported revenues of $892 million. Chase Securities acted as financial advisor to HCR and SBC Warburg Dillon Read was financial advisor to Manor Care. HCR MANOR CARE FACT SHEET
HCR Manor Care Combined Facilities: LTC 124 171 295 Outpatient Therapy Clinics 76 -- 76 Subacute/Rehab 116 -- 116 Assisted Living 5 42 47 Acute Care Hospital -- 1 1 Home Health(l) 33 1 34 National Pharmacy 4 -- 4 States Covered 16 29 32 Top Five States 1) Ohio 1) Pennsylvania 1) Pennsylvania 2) Florida 2) Illinois 2) Ohio 3) Michigan 3) Florida 3) Florida 4) Texas 4) Ohio 4) Illinois 5) Pennsylvania 5) Maryland 5) Michgan Quality Mix(2) Private/owner 44% 56% 51% Medicare 26% 18% 21% Medicaid 30% 26% 28% Occupancy 89% 88% 89%
(1) Includes Manor Care's equity interest in In Home Health. (2) Excludes Hospital for Manor Care. HCR MANOR CARE FACT SHEET (Dollars in millions, except otherwise noted)
LTM(3) HCR Manor Care Combined Revenue $905 $1,355 $2,260 EBITDA 156 223 379 EBIT 118 145 263 Net Income 73 100 173 Cash $3 $45 $48 Total Assets 949 1,793 2,742 Total Debt 293 478 771 Total Equity 446 816 1,262
4 Shares outstanding(MM) 44.8 63.7 108.5 Debt/Capitalization 40% 37% 38% Debt/EBITDA 1.9x 2.1x 2.0x
(3) Based on HCR and Manor Care's 10-K and 10-Q SEC Filings. Manor Care results adjusted for Vitalink transaction. SOURCE: Health Care and Retirement Corporation -----END PRIVACY-ENHANCED MESSAGE-----