SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 1, 1998
Date of Report (Date of earliest event reported)
VENCOR, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-10989 61-1055020
(State of Incorporation) (Commission (IRS Employer
File Number) Identification Number)
3300 Aegon Center,
400 West Market Street,
Louisville, Kentucky 40202
(Address of Principal Executive Offices)
Registrant's telephone number, including area code:(502) 569-7300
N/A
(Former name or former address, if changed since last report)
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Items 1-4. NOT APPLICABLE
Item 5. OTHER EVENTS
On February 1, 1998, Vencor, Inc.(the "Company") announced that it
intends to separate into two public companies, both of which are anticipated to
be listed on the New York Stock Exchange. The Company intends to create a real
estate investment trust by distributing to its stockholders shares of a newly
organized subsidiary that will own all of the Company's operating business and
non-real estate assets. The Company filed preliminary proxy materials for the
proposed distribution with the Securities and Exchange Commission on January 30,
1998. A copy of the press release is attached to this filing and is incorporated
herein by reference.
Item 6. NOT APPLICABLE
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
Exhibit 99.1 -- Press Release Dated February 1, 1998.
Items 8-9. NOT APPLICABLE
<PAGE>
SIGNATURES
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 hereunto duly authorized.
VENCOR, INC.
Date: February 3, 1998 By: /s/ W. Bruce Lunsford
------------------------
W. Bruce Lunsford
Chairman of the Board,
President and Chief
Executive Officer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated February 1, 1998
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[LOGO] AMERICA'S LONG-TERM HEALTHCARE NETWORK
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Vencor, Inc. 3300 Providian Center 400 West Market Street
Louisville, Kentucky 40202 (502) 596-7300 (502) 596-7600 Fax
Contact: Vencor Abernathy MacGregor Frank
W. Earl Reed, III Joele Frank/Judith Wilkinson
(502) 596-7380 (212) 371-5999
For Immediate Release
VENCOR ANNOUNCES PLAN TO CONVERT TO REIT AND
SPIN-OFF SEPARATE OPERATING COMPANY
LOUISVILLE, Ky (Feb. 1, 1998) - Vencor, Inc. (NYSE:VC) announced today that it
intends to separate into two public companies, both of which are anticipated to
be listed on the New York Stock Exchange. Vencor intends to create a real estate
investment trust ("REIT") by distributing to its stockholders shares of a newly
organized subsidiary ("Operating Company") that will own all of Vencor's
operating business and non-real estate assets. The real estate company, which
will be renamed "VenTrust, Inc.," will retain ownership of Vencor's land,
buildings and other improvements, including long-term acute care hospitals and
nursing centers, which will be leased to the Operating Company. It is
anticipated that VenTrust will provide the opportunity for both consistent cash
dividends and capital appreciation. VenTrust will be one of the nation's largest
healthcare REITs, with an expected total market capitalization of approximately
$2.5 billion.
The Operating Company will continue to operate and develop all of the
present businesses of Vencor and will assume the "Vencor" name when Vencor
becomes VenTrust. The Operating Company will be, as Vencor is today, one of the
largest providers of long-term healthcare services in the United States. The
Operating Company's operations will continue to include 60 long-term acute care
hospitals containing 5,273 licensed beds, 309 nursing centers containing 40,383
licensed beds and the Vencare contract services business.
Vencor expects that the distribution of the Operating Company will
occur in the second quarter of 1998 and that VenTrust will be taxed as a REIT
for federal income tax purposes beginning January 1, 1999. The distribution is a
taxable transaction to both Vencor and Vencor stockholders, but Vencor expects
that it will incur little or no taxable gain as a result of the transaction.
After the distribution, the Operating Company and VenTrust will each
pursue their own business strategies that will be focused on becoming high
growth companies in their respective businesses. W. Bruce Lunsford, Chairman,
President and Chief Executive Officer of Vencor will be the Chairman and Chief
Executive Officer of both VenTrust and Vencor, and the two companies' Boards of
Directors will have Mr. Lunsford in addition to Mr. R. Gene Smith in common.
W. Bruce Lunsford, Chairman, President and Chief Executive Officer of
Vencor, said, "The conversion of Vencor into a REIT and the spin-off of the
Operating Company will benefit the Company's stockholders by capturing all of
the economic benefits of both the REIT and the Operating Company. We believe our
new structure will enhance stockholder value and maximize
-MORE-
<PAGE>
Vencor Announces REIT Spin-Off
Page 2
Feb. 1, 1998
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operational efficiencies. As one of the largest service providers in the
healthcare industry, the Operating Company will be well positioned to take
advantage of the surging demand for long-term healthcare services expected to
arise from changing U.S. demographics. VenTrust will also benefit from the same
fundamentals with growth anticipated from both the Operating Company and other
high quality operators."
Mr. Thomas T. Ladt, Executive Vice President of Operations of Vencor,
will become President and Chief Operating Officer of VenTrust. Mr. T. Richard
Riney, presently Chief Real Estate counsel at Vencor, will become Vice
President, General Counsel and Secretary. The Company expects to hire a Chief
Financial Officer and a Vice President of Development prior to the time of the
distribution. VenTrust's proposed Board of Directors would include six members,
two of whom will also be on the Vencor board.
The executive team that currently manages Vencor will manage the
Operating Company. Management will include Mr. W. Bruce Lunsford as Chairman of
the Board, President and Chief Executive Officer; Mr. Michael R. Barr as
Executive Vice President and Chief Operating Officer; and Mr. W. Earl Reed, III
as Executive Vice President and Chief Financial Officer.
Vencor's current employees will become employees of the Operating
Company. There is expected to be no change in the employees' compensation or
benefits as a result of this action.
Completion of the distribution will require stockholders, regulatory
and other approvals. Vencor's preliminary proxy materials for the proposed
distribution were filed with the Securities and Exchange Commission on Friday,
January 30, 1998.
Vencor also announced in connection with its planned conversion to a
REIT that Vencor had amended its shareholder rights agreement to reduce the
threshold at which the rights are triggered to 9.9% from 15%. This change was
adopted because of REIT tax qualification rules that makes it advisable to limit
the voting power of any shareholder to 9.9%. Vencor's existing more than 9.9%
stockholder is grandfathered under the rights agreement amendment, but it may
not acquire any additional shares without triggering the rights.
Goldman Sachs & Co. is acting as financial advisor to Vencor, Inc.
Vencor, a $3 billion long-term healthcare company, owns and operates a
national network of hospitals, nursing centers and contract service providers in
46 states.
The above statements include forward-looking statements. Vencor
cautions investors that forward-looking statements are inherently uncertain and
stockholders must recognize that actual results may differ from Vencor's
expectations. Numerous factors exist which, in some cases have affected, and in
the future could cause results to differ materially from these expectations.
These statements involve risks and uncertainties concerning the implementation
and interpretations of the healthcare reform legislation and other factors as
detailed from time to time in Vencor's filings with the Securities and Exchange
Commission.
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