Seattle Company Sticks to Its Hostile Offer for ARV

The Seattle company that wants to take over ARV Assisted Living Inc. said Tuesday that it will continue its $313.2-million hostile tender offer despite the retirement home operator’s latest rebuff.

“Our plans haven’t changed,” said Raymond R. Brandstrom, president of Emeritus Corp. “The issue that we are presenting to the shareholders is: Do you want $17.50 a share today or do you want an unspecified amount at some unspecified time in the future depending on the efforts of current managers?”

The company on Monday urged shareholders to reject the Emeritus offer.

Emeritus picked up support Tuesday from ARV’s former chairman and chief executive, Gary L. Davidson. He joined Emeritus in calling for a special meeting of ARV shareholders to consider the tender offer. That meeting is set for Feb. 6.

An Emeritus spokesman said that about 16% of ARV’s shareholders have sided with the Seattle firm, which hopes to pick up a majority of the shares by the time its tender offer expires Jan. 21.

ARV shareholders will gather for their regular annual meeting Jan. 28 and will vote on, among other items, an Emeritus proposal to remove ARV’s directors. Davidson said he hasn’t decided yet how to vote on that issue.

Emeritus, which owns 6.8% of ARV, hopes to turn the special meeting on Feb. 6 into a vote on the acquisition of remaining shares that aren’t tendered. It also is fighting in court a recent deal that gave a 39.1% stake in ARV to an affiliate of Lazard Freres & Co., a New York investment firm.

ARV directors unanimously voted to reject a merger with Emeritus, saying the price, which has been raised from the original bid of $14 a share, is still inadequate. The company’s chairman, Howard G. Phanstiel, said in two letters sent Monday to shareholders that Emeritus is offering “a pig in a poke” and is placing “condition after condition” on its bid.

“Not adequate compared to what?” Emeritus’ Brandstrom said Tuesday. “I have not seen anything [from ARV] that lays out to shareholders how they are better off staying independent than with $17.50 a share in cash.”

Dow Jones News Service contributed to this report.