Manor Care Appears to Have Won Battle to Gain Control of In Home Health

Toledo, Ohio

Manor Care and Minnetonka, Minn.-based In Home Health Inc. have reached an agreement that allows Manor Care to acquire all outstanding shares of the home medical equipment company.

The cash merger, which has been approved by In Home Health's board of directors, means shareholders will receive $3.70 for each share of In Home Health common stock. The merger is subject to various conditions and a vote by In Home Health shareholders, officials said.

At press time in mid-October, the date for the special shareholders meeting had not been set. In Home Health officials indicated, however, that the merger was basically a done deal. Manor Care's preferred and common stock holdings give the company the right to cast nearly 76 percent of the votes at the meeting.

The agreement follows Manor Care's move earlier this year to take control of In Home Health. In May, Manor Care, which operates 425 long-term care centers, assisted living facilities and outpatient rehabilitation clinics, demanded that all but two members of the In Home Health board be removed, that the board number be fixed at six and that the other four seats be held by officers and employees of Manor Care or its subsidiaries. Those demands were propelled by concern about shareholder value, Manor Care officials said.

"Our preliminary analysis indicates that we should be able to offer shareholders a meaningful premium to the current trading price of IHHI shares and provide them with an alternative to holding those shares," Manor Care officials said in a letter to IHHI. In Home Health was trading in the $2 range at the time; it since has traded at about $3.80.