<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 8)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
ARV ASSISTED LIVING, INC.
(NAME OF SUBJECT COMPANY)
ARV ASSISTED LIVING, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, NO PAR VALUE
(INCLUDING THE ASSOCIATED SERIES C JUNIOR PARTICIPATING
PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
00204C107
(CUSIP NUMBER OF CLASS OF SECURITIES)
SHEILA M. MULDOON, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ARV ASSISTED LIVING, INC.
245 FISCHER AVENUE, SUITE D-1
COSTA MESA, CA 92626
(714) 751-7400
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S)
FILING STATEMENT)
WITH COPIES TO:
WILLIAM J. CERNIUS, ESQ. ALEXANDER F. WILES, ESQ.
LATHAM & WATKINS IRELL & MANELLA LLP
650 TOWN CENTER DRIVE, 1800 AVENUE OF THE STARS,
20TH FLOOR SUITE 900
COSTA MESA, CA 92626 LOS ANGELES, CA 90067
(714) 540-1235 (310) 203-7659
<PAGE> 2
INTRODUCTION
The Solicitation/Recommendation Statement on Schedule 14D-9 (as amended
through the date hereof, the "Statement"), originally filed on January 5, 1998,
by ARV Assisted Living, Inc., a California corporation (the "Company"), relates
to an offer by EMAC Corp., a Delaware corporation ("EMAC") and a wholly-owned
subsidiary of Emeritus Corporation, a Washington corporation ("Emeritus"), to
purchase all outstanding shares of the Company's common stock, no par value
(including the associated Series C Junior Participating Preferred Stock Purchase
Rights issued pursuant to the Rights Agreement, dated as of July 14, 1997,
between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent). All capitalized terms used herein without definition have the respective
meanings set forth in the Statement.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
The response to Item 4 is hereby amended by adding the following after
the final paragraph of Item 4:
On January 23, 1998, the law firm of Davis Polk & Wardwell, counsel to
Emeritus, sent a letter to the Company taking issue with certain statements in
the Company's January 16, 1998 Letter to Shareholders. A copy of the Davis Polk
letter is attached as Exhibit 26 hereto and incorporated herein by reference.
Shareholders should consider the views expressed in the Davis Polk letter when
deciding whether or not to tender their shares and in deciding how to vote at
the forthcoming Annual Meeting.
On January 27, 1998, the Company issued a press release announcing that
the California State Court has denied, in its entirety, Emeritus' request for a
preliminary injunction. Such press release is filed as Exhibit 28 hereto and
incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The response to Item 8 is hereby amended by adding the following after
the final paragraph of Item 8:
On January 26, 1998, the State Court issued a ruling denying Emeritus'
request for a preliminary injunction. A copy of such ruling will be filed in a
subsequent amendment to the Statement.
On January 26, 1998, the Federal Court issued a ruling denying the
Company's motion for a preliminary injunction. A copy of such ruling will be
filed in a subsequent amendment to the Statement.
-2-
<PAGE> 3
ITEM 9. MATERIALS TO BE FILED AS EXHIBITS
The response to Item 9 is hereby amended by adding the following new
exhibit:
26 Text of Davis Polk Letter to the Company, dated January 23, 1998.
27 Reserved.
28 Text of Press Release issued by the Company, dated January 27, 1998.
-3-
<PAGE> 4
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
ARV ASSISTED LIVING, INC.
By: /s/ SHEILA M. MULDOON
--------------------------------------
Sheila M. Muldoon, Esq.
Vice President, General
Counsel and Secretary
Dated January 27, 1998
-4-
<PAGE> 5
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE NO.
- --------------------------------------------------------------------------------
26 Text of Davis Polk Letter to the Company, dated January 23,
1998.
27 Reserved.
28 Text of Press Release issued by the Company, dated January 27,
1998.
-5-
<PAGE> 1
EXHIBIT 26
[DAVIS POLK & WARDWELL LETTERHEAD]
January 23, 1998
Re: ARV'S JANUARY 16 LETTER TO SHAREHOLDERS
Sheila M. Muldoon
Vice President, General Counsel
and Secretary
ARV Assisted Living, Inc.
245 Fischer Ave., Suite D-1
Costa Mesa, CA 92626
Dear Ms. Muldoon:
Last weekend Emeritus received a letter from ARV Assisted Living,
Inc., ("ARV") to its shareholders dated January 16, 1998 (the "Shareholder
Letter") relating to its annual meeting of shareholders scheduled for January
28, 1998.
We are writing to draw your attention to certain statements in the
Shareholder Letter which Emeritus believes go beyond the bounds of fact-based
allegations and are based on unfounded speculation. We request that you either
withdraw the statements or provide us with an adequate basis for supporting the
statements made.
The Shareholder Letter states that Emeritus' $17.50 offer of "so
called immediate cash" is an "illusion" and that Emeritus "will reduce the
price" once its slate of nominees is elected. ARV's statements and others like
it in the Shareholder Letter are speculation. Emeritus has stated in its proxy
materials, tender offer documents and other public statements that its offer is
$17.50 per share in cash for all shares of ARV.
The Shareholder Letter also states that the leases on 18 ARV facilities
"will be subject to immediate termination" if Emeritus' nominees are elected.
The operative provision in 16 of the 18 leases is ambiguous at best. The
provision states that "any change (voluntary or involuntary, by operation of
law or otherwise but excluding any change as result of an initial public
offering of [ARV's] stock) in the person(s), entity or entities which
ultimately exert effective control over the management of the affairs of [ARV]
as of the date hereof" constitutes an assignment of the lease which is subject
to the consent of the landlord. ARV is improperly using this as a scare tactic.
There is
<PAGE> 2
no evidence that the landlords have taken this position or, more importantly,
that it is a correct legal position. The plain reading of the language raises
significant doubt as to whether a successful director election contest would
constitute a "change . . . in the person(s), entity or entities which ultimately
exert effective control over the management of the affairs" of ARV. Indeed, if
it is a valid position of the landlords then the actions of the ARV Board over
the last six months likely already triggered the provision. During that time
period the ARV Board (i) significantly altered the company's shareholder
composition by selling nearly 40% to one institution, (ii) replaced the
Chairman of the Board twice, (iii) replaced the President, and (iv) removed
two board members from the board and replaced them with four new directors.
Furthermore, based on Gary Davidson's deposition testimony (see page
179 of the Davidson deposition), we understand that the landlords gave their
consent to the Prometheus transactions and therefore we believe that
suggestions to your shareholders that the landlords are eager to reprice the
lease terms (or terminate the leases) is entirely misleading. If the Emeritus
nominees are elected at the Annual Meeting, the public shareholders would
continue to own ARV and the Emeritus director nominees would owe these
shareholders fiduciary duties. The scare tactics ARV is resorting to and ARV's
failure to provide full and balanced disclosure on this issue are misleading
shareholders as to the effects of voting for the Emeritus nominees.
The overall effect of the disclosure in the Shareholder Letter is to
misrepresent issues about the election contest and tender offer that are
important to the shareholders and thus make it extremely difficult for the
shareholders to make an informed decision concerning these matters. In order to
make an informed decision, the shareholders must be provided with accurate
information. In addition to our request that ARV either withdraw the
statements or provide us with an adequate basis for supporting the statements
made, Emeritus requests that ARV issue corrective disclosure. In the event
that you choose not to correct your misleading statements we will be obligated
to bring these issues to the attention of Judge McLaughlin.
Very truly yours,
/s/ NICHOLAS P. BROUNTAS, JR.
-------------------------------------
Nicholas P. Brountas, Jr.
cc: Howard G. Phanstiel
ARV Assisted Living, Inc.
William J. Cernius
Latham & Watkins
<PAGE> 1
EXHIBIT 28
NEWS RELEASE
[ARV LOGO]
FOR IMMEDIATE RELEASE
CONTACT: Mitch Gellman
Director of Investor Relations
714/435-4322
E-Mail: [email protected]
ARV ASSISTED LIVING WINS SIGNIFICANT COURT VICTORY
- EMERITUS'S PRELIMINARY INJUNCTION REQUEST IS DENIED IN ITS ENTIRETY -
Costa Mesa, Calif. - January 27, 1998 - ARV Assisted Living, Inc.
(Amex:SRS) announced today that the California State Court denied, in its
entirety, Emeritus Corporation's request for a preliminary injunction yesterday.
Emeritus had sought to rescind a series of transactions that culminated in an
$87 million investment in ARV by an affiliate of Lazard Freres Real Estate
Investors LLC. Alternatively, Emeritus tried to prevent Lazard from voting the
approximately 4.3 million shares it received in December 1997 when ARV redeemed
convertible notes it previously issued to Lazard.
Howard Phanstiel, ARV's Chairman and Chief Executive Officer, said: "We
are ecstatic about the court's decision because we can pursue important
initiatives we believe will enhance shareholder value." Mr. Phanstiel also said:
"The illusory nature of the Emeritus offer was proven once again. Emeritus
promised investors $17.50 per
-more-
<PAGE> 2
-2-
share in immediate cash, if its slate was elected, but stated its tender offer
was conditioned upon the Court's enjoining the issuance of shares to Prometheus
in December 1997.
"In the court hearing yesterday, Emeritus voluntarily withdrew its claim
for rescission of the Lazard transactions from its request for a preliminary
injunction proving - what we have believed all along - that the Emeritus offer
of $17.50 in immediate cash was smoke and mirrors."
ARV Assisted Living, Inc. was founded in 1980. The Company is one of the
nation's leading providers of assisted living. ARV operates 49 communities
containing about 6,300 units in 10 states. It has five communities containing
633 units under construction in Florida, Massachusetts and Nevada.
###
