A court has ruled that voting on the proposed $4.1 billion merger involving Louisville health care giants Kindred Healthcare and Humana can begin as planned Thursday.

A large Kindred shareholder, Brigade Capital Management, had sought to stop the proceedings pending the outcome of a lawsuit in which Brigade asserted that Kindred had breached its fiduciary duty by accepting such a low transaction price.

However, the Court of Chancery of the State of Delaware rejected Brigade’s request after oral arguments on Wednesday, which means voting on the deal can begin as scheduled at 10 a.m. Thursday.

But the ruling also represents a partial victory for Brigade: The court required that voting continue for five additional business days to give shareholders more time to seek appraisal of their stock, according to a Kindred filing with the Securities and Exchange Commission. Kindred expects to reveal results on April 5.

Brigade, a New York-based investment firm that owns about 5.7 percent of Kindred’s shares, had filed a lawsuit in Delaware to permanently stop the acquisition, asserting, among other things, “breach of fiduciary duty,” according to SEC filings.

Details of the ruling weren’t immediately available from the Delaware court, though a spokeswoman there confirmed that a ruling had been issued. Kindred said in the filing that it was pleased with the court’s decision. Brigade could not be reached immediately.

Kindred, a Louisville-based hospital, rehabilitation and home health company, announced Dec. 19 that its board had agreed to be acquired in a $4.1 billion all-cash deal by two private equity partners and Louisville-based insurer Humana.

Under the proposal, the company would be split into to companies: Kindred at Home would focus on home health, hospice and community care and would be owned 40 percent Humana and 60 percent by TPG Capital and Welsh, Carson, Anderson & Stowe. Kindred Healthcare would focus on the company’s long-term acute care hospitals and inpatient rehabilitation facilities.

The CEOs of the companies have said that the merger would allow them to transform how older Americans, especially those with chronic conditions, get care in their home and would boost Louisville’s status as a national leader in aging and health.

Brigade had announced Dec. 27 that it opposed the deal because of the “disappointing and grossly inadequate” price of $9 per share for which Humana and the private equity partners want to buy Kindred. The company’s shares on Wednesday were trading near $9.20.

Kindred previously has told Insider that Brigade’s lawsuit “is entirely without merit.”

The company said it still expects to complete the deal this summer.

[dc_ad size="9"] [dc_ad size="10"]
Boris Ladwig
Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.