DALLAS -- The Hillhaven Corp., a leading nursing home chain, rebuffed a hostile $1.5 billion offer from rival Horizon Healthcare Corp. yesterday, refusing even to negotiate. Hillhaven's chief executive, Bruce L. Busby, said that Horizon had offered too little and could bring Hillhaven few savings or advantages.
Hillhaven has trimmed its debt, raised its stock price and readied itself for rapid growth, he said. "The offer is clearly inadequate," Mr. Busby said. "It's a flat no."
In response, Horizon refused to raise its offer unless the Hillhaven board agreed to meet or furnish more information, raising the prospect of a stalemate. "The $28 offer has significant merit by giving immediate value to the Hillhaven shareholders, as much as they could earn in the coming year if the company remained independent," said Neal M. Elliott, Horizon's chief executive, in a prepared statement last night.
Under a strong anti-takeover law in Nevada, where Hillhaven is incorporated, Hillhaven filed suit yesterday to block Horizon's offer, Mr. Busby said. He rebuked his largest shareholder, National Medical Enterprises, for backing the bid, contending that it wanted to redeem its own special class of stock to the disadvantage of other shareholders.