The shareholders of National Health Realty (NHR) have voted to approve the merger of NHR with a wholly-owned subsidiary of NHC. Following the meeting, the shareholders of National HealthCare (NHC) approved the issuance of preferred stock in connection with the NHR merger. As a result of that action, effective October 31, 2007, each NHR common share was converted into one share of NHC series A convertible preferred stock plus $9 in cash. Each share of the preferred stock will be entitled to annual preferred dividends of $0.80 per share and will have a liquidation preference of $15.75 per share.
After the 5th anniversary of the closing date, NHC will have the option to redeem the preferred stock, in whole or in part, for $15.75 cash per share (plus accrued but unpaid dividends); provided that the preferred stock will not be redeemable prior to the 8th anniversary of the closing date unless the average closing price for NHC common stock for 20 trading sessions equals or exceeds the conversion price. The conversion price will be adjusted to reflect any future NHC stock splits or stock dividends. The cash required to complete the merger was provided substantially from NHC’s existing liquidity reserves.
Robert Adams, president and CEO of NHC, said: “This merger, combined with our new credit facility, will provide a larger asset and equity base that enables us to move forward with future growth opportunities and enhances our prospects for long term increases in shareholder value as we complete our 36th year of operation. This strategic move will provide NHC a focused, completely aligned approach in both development and operations.”