Emeritus Bids for ARV Assisted Living

As big-stakes competition heats up in an industry that provides living facilities for the nation’s frail elderly, Emeritus Corp. made an unsolicited $210-million bid Monday for ARV Assisted Living Inc. in hopes of thwarting a competing offer.

Lazard Freres & Co. previously announced plans to acquire 49.9% of Costa Mesa-based ARV.

An ARV spokesman said the board met to discuss the Emeritus offer Monday and plans to respond today. The company declined to offer details.

Analysts say that if Emeritus buys ARV, the Seattle-based company would become the industry’s largest publicly held company. It would operate 164 homes with apartments for 17,200 seniors in 29 states.

In the Emeritus proposal, ARV stockholders would receive $16.50 a share for each share of ARV, or $1.75 more than the company’s Friday closing price of $15.25. Emeritus also would assume $91 million in ARV debt.

ARV shares ran up to a 52-week high of $17.25 in Nasdaq trading, before closing at $16.88, up $1.63 for the day. Emeritus stock closed at $16 a share, down 25 cents, on the American Stock Exchange.

Emeritus said it has acquired 8% of ARV on the open market. The company started buying ARV stock last spring, and in July quietly offered to acquire ARV for $14 a share, said Emeritus President Raymond Brandstrom. Several days later, ARV announced its agreement with Lazard.

“We were more than surprised,” Brandstrom said.

Lazard Freres’ Prometheus Assisted Living offered $14 a share, or up to $135 million, for a 49.9% stake in ARV. It has already bought a third of that amount, according to regulatory filings.

ARV shareholders have not yet voted on whether the Lazard Freres unit may complete its purchase of up to a 49.9% stake.

A Lazard spokesman would not say whether Lazard will sweeten its offer.