Dallas Firm Seeks Control of Care Enterprises Inc.
Southmark Corp., the Dallas-based financial services and real estate conglomerate, said Tuesday that it wants to acquire control of troubled Care Enterprises Inc. and has agreed to buy the voting rights of a substantial block of the nursing home operator’s stock.
Care Enterprises, which has been facing stiff financial problems and managerial turmoil for the last several months, had no immediate response.
However, analysts said the Southmark proposal offers the company a strong financial partner and an opportunity to end the soap opera-like family feuding that has racked its executive suite for the last 18 months.
In its announcement, Southmark said it had signed a letter of intent to acquire the voting rights of co-founder Ted D. Nelson in exchange for a $7.3-million loan. Nelson controls about 23% of the voting shares. The deal, collateralized by the shares, values his stock at an even $4 each.
In addition, Southmark revealed that it had earlier offered to buy the Care Enterprises stake owned by co-founder Dee. R. Bangerter, Nelson’s half-brother, for up to $3 per share. It was not immediately known how Bangerter responded.
Southmark, which already owns 80% of National Heritage Inc. the nation’s fourth-largest nursing home operator, also said it plans to “have discussions with the management of Care Enterprises to explore Southmark’s intentions.” Care Enterprises is about half the size of National Heritage.
Southmark officials did not disclose any intentions to acquire the remaining shares, including those of the third co-founder Lee R. Bangerter, Dee’s twin and Care Enterprises’ president. The Southmark spokesman specifically said the company was not making a tender offer “at this point.” Nevertheless, the spokesman said Southmark’s acquisition pattern has been to acquire control of a company initially and later buy out remaining shareholders.
In trading on the American Stock Exchange, Care Enterprises class A shares closed at $2.75, up 37.5 cents for the day, and class B shares closed at $3.50, up 67.5 cents.
