Manor Care Inc. of Silver Spring announced yesterday an agreement to take over another giant in the nursing home business, Cenco Inc. of Oak Brook, Ill., through a stock tender offer. If successful, the acquisition would more than double Manor Care's annual revenues and move it into the top ranks of nursing center operators nationwide.
Manor will pay $16.50 cash for "any and all" Cenco stock, a joint announcement by the two firms said. If all Cenco shares are tendered, the acquistion will cost Manor Care $207 million, according to J. Calvin Kaylor, president of Manor Care's nursing home subsidiary.
Cenco stock closed at $16.62 1/2 yesterday in trading on the New York Stock Exchange.
Kaylor said the "primary source of Manor Care's interest" in Cenco is two chains of health-care homes, American and Leader, that Cenco operates through subsidiaries. "Generally their nursing homes are the most compatible in the country to Manor Care homes," he said.
With the acquisition, Manor Care will operate about 14,000 beds, which Kaylor said would make Manor Care the fourth-largest firm in the nursing home industry, up from about 20th place today. The biggest is V Beverly Enterprises, with about 50,000 beds, he said, but Manor Care is "the most profitable in terms of return on investment."
Manor Care has annual revenues of about $115 million from its health care facilities and its Quality Inns hotel subsidiary. Cenco's revenues are about $155 million, Kaylor said.
Directors of both companies have approved the takeover agreement, their announement said. In addition, Curtiss-Wright Corp., which owns about 16 1/2 percent of Cenco's stock, has agreed to sell it to Manor Care at the tender price "unless another person makes a higher bid which Manor does not meet."
Manor Care is seeking a majority of Cenco's shares, but the announcment of the tender offer said it was "not subject to the condition that any minimum number of securities be tendered."