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EXHIBIT 11
VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED
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July 10, 2000
Mr. Clyde Michael Ford
Chairman of the Board
In Home Health, Inc.
601 Carlson Parkway, Suite 500
Minnetonka, MN 55305
Dear Mr. Ford:
As we have recently indicated to In Home Health, Inc.'s ("IHHI")
management, now that ManorCare Health Services, Inc. ("MCHS") has acquired
voting control of IHHI it has become interested in a strategic business
combination with IHHI which we believe would promote the long-term growth and
development of our companies. Based on a review of publicly available
information regarding IHHI and its operations, I propose a business combination
between MCHS and IHHI in which IHHI shareholders would receive $3.375 in cash
for each share of IHHI common stock. Our proposal is not contingent upon
financing. In our view, a combination between our two companies at this time
not only makes compelling business sense, but also represents a unique
opportunity for the shareholders of IHHI to realize the maximum value for their
shares. In addition, we believe that a business combination between MCHS and
IHHI will provide significant long-term and short-term strategic, operational,
financial and other benefits to the customers, creditors and employees of IHHI
as well as to the communities in which IHHI operates.
We are confident that IHHI's shareholders will find MCHS's all-cash
proposal extremely attractive. The $3.375 per share purchase price represents
over a 71% premium over the closing price of the IHHI shares on May 31, 2000,
the date of my letter to IHHI requesting a special meeting of the shareholders
of IHHI. We reasonably believe that the $3.375 per share purchase price is fair
and should be satisfactory to all remaining shareholders based on current and
historical prices, as well as on the purchase price of $3.375 paid in each of
the privately-negotiated share purchases that we recently concluded with
Heartland Advisors, Inc. ("Heartland"), RS Investment Management Co., LLC ("RS
Investment") and Eastbourne Capital
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Management, LLC ("Eastbourne"). Our proposal thus allows individual
shareholders to liquidate their investment in IHHI at the same price as the
large, institutional holders who sold MCHS a controlling position. As you are
aware, Heartland, RS Investment and Eastbourne are all institutional investors
possessing a great deal of financial sophistication. It is important to note
that the proposed $3.375 per share price was prepared solely on the basis of
MCHS's analysis of publicly-available information regarding IHHI. Any
transaction would be contingent upon MCHS first completing a satisfactory due
diligence review. We expect that, if granted the opportunity, such a due
diligence review could be completed by MCHS and its advisors within a short
period of time.
Of course, any transaction would be subject to the negotiation of a
definitive merger agreement on customary terms and conditions, including the
receipt of all required regulatory approvals. Notwithstanding the foregoing, we
do not expect that the transaction as proposed will encounter any significant
regulatory delays. The transaction would also be subject to the approval of the
proposed combination by the IHHI board of directors.
We strongly prefer to work with the IHHI board of directors and its
management toward the prompt consummation of a negotiated transaction that could
be presented to IHHI's shareholders as a product of our joint efforts. We hope
that the IHHI board of directors will seriously and carefully consider our
proposal and will act in accordance with its fiduciary duties and applicable
law. To that end, we are prepared to enter into immediate negotiations with the
IHHI board of directors, its management and its legal and financial advisors
regarding the terms of a negotiated transaction, during which time we would
expect to conduct our due diligence review.
We look forward to your prompt response to our proposal and to an
opportunity to meet with you to discuss moving forward to consummate a business
combination that is in the best interests of our respective companies,
shareholders customers, employees and other constituencies.
Very truly yours,
/s/ Paul A. Ormond
Paul A. Ormond
President & Chief Executive Officer
ManorCare Health Services, Inc.
cc: Board of Directors of IHHI
