SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 5, 2004
VENTAS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-10989 61-1055020
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
10350 Ormsby Park Place, Suite 300, Louisville, Kentucky 40223
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(Address of principal executive offices) (Zip Code)
(502) 357-9000
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(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets.
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On February 5, 2004, Ventas, Inc. ("Ventas") consummated the acquisition
(the "Acquisition") of ElderTrust ("ElderTrust") pursuant to the terms of the
previously disclosed Agreement and Plan of Merger, dated November 19, 2003 (the
"Merger Agreement"), among Ventas, Ventas Sub, LLC, a wholly owned direct
subsidiary of Ventas (the "Merger Sub"), and ElderTrust. Pursuant to the Merger
Agreement, the Merger Sub was merged (the "Merger") with and into ElderTrust,
with ElderTrust surviving the Merger as a wholly owned direct subsidiary of
Ventas.
As a result of the Merger, each common share of beneficial interest, par
value $.01 per share ("ElderTrust Common Shares"), of ElderTrust issued and
outstanding immediately prior to the Merger was automatically converted into the
right to receive $12.50 per share in cash, without interest (the "Merger
Consideration"). In addition, all outstanding options to purchase ElderTrust
Common Shares ("ElderTrust Options"), whether or not then exercisable or vested,
were cancelled as of the time of the Merger and each holder of an ElderTrust
Option received the Merger Consideration less the exercise price of the
applicable ElderTrust Option. Further, each outstanding ElderTrust distribution
equivalent right was cancelled as of the time of the Merger and each holder of
such distribution equivalent rights was paid an amount in cash equal to his or
her accrued and unpaid distribution equivalents as of the time of the Merger.
Concurrent with the consummation of the Merger, Ventas also purchased all
of the outstanding limited partnership units in ElderTrust Operating Limited
Partnership, the operating subsidiary of ElderTrust ("ETOP"), directly from the
unitholders at a price per unit equal to the Merger Consideration, other than
31,455 Class C Units in ETOP (which will remain outstanding).
The total consideration for the Acquisition was approximately $184 million,
including the assumption by Ventas of certain outstanding indebtedness of
ElderTrust's subsidiaries. Ventas funded the approximately $101 million cash
portion of the consideration from cash on hand at Ventas, cash on hand at
ElderTrust at the time of the Merger and borrowings under the Ventas' Second
Amended and Restated Credit, Security and Guaranty Agreement, dated as of April
17, 2002, among Ventas and certain of Ventas' subsidiaries, Bank of America,
N.A., as Issuing Bank for the Letters of Credit thereunder, Bank of America,
N.A., as Administrative Agent, UBS Warburg LLC, as Syndication Agent and the
lenders identified therein, as amended.
The purchase price for the Acquisition was determined through arms-length
negotiation between Ventas and ElderTrust.
The Acquisition adds nine assisted living facilities, one independent
living facility, five skilled nursing facilities, two medical office buildings
and one financial office building to Ventas' portfolio of assets. Ventas intends
to continue to devote such facilities to their respective present uses.
Prior to the execution of the Merger Agreement, neither Ventas nor any of
its affiliates, nor any director or officer of Ventas or any associate of any
such director or officer, had any material relationship with ElderTrust.
The description of the Merger Agreement contained in this Current Report on
Form 8-K is qualified in its entirety by reference to the text of the Merger
Agreement, which is incorporated herein by reference to Exhibit 2.1 to this
Current Report on Form 8-K.
FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
regarding the Company's and its subsidiaries' expected future financial
position, results of operations, cash flows, FFO, dividends and dividend plans,
financing plans, business strategy, budgets, projected costs, capital
expenditures, competitive positions, growth opportunities, expected lease
income, continued qualification as a real estate investment trust, plans and
objectives of management for future operations and statements that include words
such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend,"
"may," "could," "should," "will" and other similar expressions are
forward-looking statements. Such forward-looking statements are inherently
uncertain, and security holders must recognize that actual results may differ
from the Company's expectations. The Company does not undertake a duty to update
such forward-looking statements.
Actual future results and trends for the Company may differ materially
depending on a variety of factors discussed in the Company's filings with the
Securities and Exchange Commission. Factors that may affect the plans or results
of the Company include, without limitation, (a) the ability and willingness of
Kindred Healthcare, Inc. ("Kindred") and certain of its affiliates to continue
to meet and/or perform their obligations under their contractual arrangements
with the Company and the Company's subsidiaries, including without limitation
the lease agreements and various agreements entered into by the Company and
Kindred at the time of the Company's spin off of Kindred on May 1, 1998 (the
"1998 Spin Off"), as such agreements may have been amended and restated in
connection with Kindred's emergence from bankruptcy on April 20, 2001, (b) the
ability and willingness of Kindred to continue to meet and/or perform its
obligation to indemnify and defend the Company for all litigation and other
claims relating to the healthcare operations and other assets and liabilities
transferred to Kindred in the 1998 Spin Off, (c) the ability of Kindred and the
Company's other operators to maintain the financial strength and liquidity
necessary to satisfy their respective obligations and duties under the leases
and other agreements with the Company, and their existing credit agreements, (d)
the Company's success in implementing its business strategy and the Company's
ability to identify, consummate and integrate diversifying acquisitions or
investments, (e) the nature and extent of future competition, (f) the extent of
future healthcare reform and regulation, including cost containment measures and
changes in reimbursement policies, procedures and rates, (g) increases in the
cost of borrowing for the Company, (h) the ability of the Company's operators to
deliver high quality care and to attract patients, (i) the results of litigation
affecting the Company, (j) changes in general economic conditions and/or
economic conditions in the markets in
which the Company may, from time to time, compete, (k) the ability of the
Company to pay down, refinance, restructure, and/or extend its indebtedness as
it becomes due, (l) the movement of interest rates and the resulting impact on
the value of and the accounting for the Company's interest rate swap agreement,
(m) the ability and willingness of the Company to maintain its qualification as
a REIT due to economic, market, legal, tax or other considerations, (n) final
determination of the Company's taxable net income for the year ending December
31, 2003, (o) the ability and willingness of the Company's tenants to renew
their leases with the Company upon expiration of the leases and the Company's
ability to relet its properties on the same or better terms in the event such
leases expire and are not renewed by the existing tenants, and (p) the impact on
the liquidity, financial condition and results of operations of Kindred and the
Company's other operators resulting from increased operating costs and uninsured
liabilities for professional liability claims, and the ability of Kindred and
the Company's other operators to accurately estimate the magnitude of such
liabilities. Many of such factors are beyond the control of the Company and its
management.
Item 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
Any required financial statements will be filed by amendment to this
Current Report on Form 8-K not later than 60 days after the date on
which this Current Report on Form 8-K is required to be filed.
(b) Pro forma financial information.
Any required pro form financial information will be filed by amendment
to this Current Report on Form 8-K not later than 60 days after the
date on which this Current Report on Form 8-K is required to be filed.
(c) Exhibits:
2.1 Agreement and Plan of Merger by and among Ventas, Inc., Ventas
Sub, LLC and ElderTrust dated as of November 19, 2003
(incorporated herein by reference to Exhibit 2.1 to the Current
Report on Form 8-K filed by Ventas, Inc. on November 21, 2003).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VENTAS, INC.
(Registrant)
Date: February 19, 2004
By: /s/ T. Richard Riney
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Name: T. Richard Riney
Title: Executive Vice President and
General Counsel