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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934
(Amendment No. 2)
TRANSITIONAL HOSPITALS CORPORATION
(Name of Subject Company)
VENCOR, INC.
LV ACQUISITION CORP.
(Bidders)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
893719104
(CUSIP Number of Class of Securities)
Jill L. Force
Senior Vice President,
Secretary and General Counsel
Vencor, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
(502) 596-7300
(Name, Address, and Telephone Numbers of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
Copy to:
Joseph B. Frumkin, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
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<PAGE>
This Amendment No. 2 (this "Amendment") is filed to supplement and
amend the information set forth in the Tender Offer Statement on Schedule 14D-1
filed by Vencor, Inc., a Delaware corporation ("Vencor"), and LV Acquisition
Corp., a Delaware corporation (the "Purchaser"), on May 7, 1997 as previously
amended (as amended, the "Schedule 14D- 1") with respect to the shares of Common
Stock, par value $1.00 per share, of Transitional Hospitals Corporation, a
Nevada corporation (the "Company"), including the associated rights to purchase
Series B Junior Participating Preferred Stock of the Company. Unless otherwise
indicated, the capitalized terms used herein shall have the meanings specified
in the Schedule 14D-1, including the Offer to Purchase (the "Offer to Purchase")
attached as Exhibit (a)(1) thereto.
Item 3. Past Contacts, Transactions or Negotiations With the Subject Company.
(b) On May 14, 1997, counsel for Vencor sent a letter (the "May 14
Letter") to counsel for the Company which, among other things, (i) requested
that the Company conduct itself so as not to give Select Medical any right to
receive a termination fee pursuant to the Select Medical Merger Agreement and
(ii) noted that pursuant to the terms of the Select Medical Merger Agreement,
the Company could terminate the Select Medical Merger Agreement, in certain
circumstances, without paying a termination fee to Select Medical. The foregoing
description of the May 14 Letter is qualified in its entirety by the text of the
May 14 Letter which is being filed herewith as exhibit (a)(9) to the Schedule
14D-1 and is incorporated herein by reference.
In addition, counsel for Vencor and the Company are discussing the
possible terms of a merger agreement among Vencor, the Purchaser and the
Company.
Item 10. Additional Information.
(c) Based on publicly available information, Vencor believes that the
Company owns shares of capital stock of Behavioral Healthcare Corporation, a
Delaware corporation ("BHC"). The Purchaser's indirect acquisition of these
shares in connection with the acquisition of Shares pursuant to the Offer is
subject to the HSR Act. On May 9, 1997 Vencor and the Purchaser filed a
Notification and Report Form pursuant to the HSR Act with the FTC and the
Antitrust Division with respect to the shares of capital stock of BHC which
Vencor believes are owned by the Company.
Item 11. Material to be Filed as Exhibits.
Exhibit No. Description
(a)(9) Text of the May 14 Letter.
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SIGNATURE
After due inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this Amendment is true, complete and
correct.
Dated: May 14, 1997
VENCOR, INC.
By:/s/ W. Bruce Lunsford
Name: W. Bruce Lunsford
Title: Chairman of the Board, President
and Chief Executive Officer
LV ACQUISITION CORP.
By:/s/ W. Bruce Lunsford
Name: W. Bruce Lunsford
Title: Chairman of the Board, President
and Chief Executive Officer
Exhibit (a)(9)
[Text of the May 14 Letter]
As you are aware, Vencor, Inc. ("Vencor") does not wish Transitional
Hospitals Corporation ("THC") to be required to make any payment to Select
Medical Corporation ("Select") upon termination of THC's merger agreement with
Select (the "Select Merger Agreement"). Vencor has committed that two-thirds of
any such amounts saved will go to THC stockholders or charities.
Under the Select Merger Agreement, THC is purportedly required to pay
$19,415,000 under certain circumstances. Vencor has asked me to request through
you that THC conduct itself so as not to give Select any right to receive a
termination fee pursuant to Sections 9.2(b)(i), 9.2(b)(ii), 9.2(b)(iii) or
9.2(b)(iv) of the Select Merger Agreement.
Section 9.2(b)(v) of the Select Merger Agreement provides that a
termination fee is payable if the Select Merger Agreement is terminated by
Parent pursuant to Section 9.1(g) or in the event THC shall consummate an
Acquisition Proposal (as defined) on terms more favorable than the Select
merger. Because the final version of the Select Merger Agreement provides that
only THC may terminate the Select Merger Agreement pursuant to Section 9.1(g),
THC may, under the circumstances contemplated by Section 9.1(g), terminate the
Select Merger Agreement without payment of any termination fee to Select.
Thereafter, a fee might be payable if THC shall "consummate an Acquisition
Proposal". Thus the Select Merger Agreement permits THC to terminate without
payment of any termination fee. This would permit any determination as to
Select's right to a termination payment to be deferred until after consummation
of an Acquisition Proposal. While this may defer resolution of the termination
payment beyond the expiration date of Vencor's tender offer, any reduction in
the termination fee payable will benefit charities in the communities in which
THC has facilities.
Please contact me if you have any questions regarding the foregoing.
