==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
AMENDMENT NO. 7
TO
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
and
AMENDMENT NO. 10
TO
SCHEDULE 13D
under the Securities Exchange Act of 1934
ARV ASSISTED LIVING, INC.
(Name of Subject Company)
EMERITUS CORPORATION
and
EMAC CORP.
(Bidder)
Common Stock, No Par Value Per Share
(Including the Preferred Share Purchase Rights)
(Title of Class of Securities)
-----------------
00204C107
(CUSIP Number)
Raymond R. Brandstrom
Emeritus Corporation
3131 Elliot Avenue
Suite 500
Seattle, Washington 98121
Telephone: (206) 298-2909
(Name, Address and Telephone Number of Persons Authorized to Receive
Notices and Communications on Behalf of Bidder)
Copies to:
Phillip R. Mills, Esq. Michael Stansbury, Esq.
Davis Polk & Wardwell Perkins Coie
450 Lexington Avenue 1201 Third Avenue
New York, New York 10017 Suite 4000
Telephone: (212) 450-4000 Seattle, Washington 98101
-----------------
December 19, 1997
(Date Tender Offer First Published, Sent or Given to Security Holders)
CUSIP No. 00204C107
1 NAMES OF REPORTING PERSONS
Emeritus Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
WA
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
1,077,200
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES [X]
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
6.8%
10 TYPE OF REPORTING PERSON
CO
CUSIP No. 00204C107
1 NAMES OF REPORTING PERSONS
EMAC Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DE
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
1,077,200
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES [X]
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
6.8%
10 TYPE OF REPORTING PERSON
CO
This Amendment No. 7 amends and supplements the Tender Offer
Statement on Schedule 14D-1 (the "Statement"), filed December 19, 1997 by
Emeritus Corporation, a Washington corporation ("Emeritus"), and EMAC Corp., a
Delaware corporation (the "Bidder") and a wholly owned subsidiary of Emeritus,
as amended by Amendments No. 1, 2, 3, 4, 5 and 6 relating to the Bidder's
offer to purchase all outstanding shares of Common Stock, no par value per
share, of ARV Assisted Living, Inc., a California corporation ("ARV"), at
$17.50 per share, net to the seller in cash, upon terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal, copies of which are attached as Exhibits (a)(1) and (a)(2) to the
Statement. This Amendment No. 7 constitutes Amendment No. 10 to the Report on
Schedule 13D filed October 14, 1997 by Emeritus, as amended. Capitalized
terms not separately defined herein shall have the meanings specified in the
Statement.
Item 10. Additional Information.
(f) On January 22, 1998, Emeritus issued the press release
attached hereto as Exhibit (a)(12). The information set forth in the press
release is incorporated herein by reference.
On January 22, 1998, Emeritus sent the letter attached hereto
as Exhibit (a)(13) to ARV shareholders. The information set forth in the
letter is incorporated herein by reference.
Item 11. Material to be Filed as Exhibits
(a)(12) Press Release, dated January 22, 1998.
(a)(13) Letter, dated January 22, 1998, from Emeritus to ARV
shareholders.
SIGNATURE
After due 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.
Dated: January 23, 1998
EMERITUS CORPORATION
By: /s/ Raymond R. Brandstrom
-------------------------------
Name: Raymond R. Brandstrom
Title: President
EMAC CORP.
By: /s/ Raymond R. Brandstrom
-------------------------------
Name: Raymond R. Brandstrom
Title: President
Exhibit (a)(12)
Contacts: Kelly J. Price
Chief Financial Officer
(206) 298-2909
or
Roy Winnick or Mark Semer
Kekst and Company
(212) 521-4842 or 4802
INSTITUTIONAL SHAREHOLDER SERVICES (ISS) ENDORSES
EMERITUS PROPOSAL IN ARV ASSISTED LIVING PROXY CONTEST
SEATTLE, January 22, 1998 -- Emeritus Corporation (Amex: ESC) today reported
that Institutional Shareholder Services Inc. (ISS) has recommended to its
clients that they vote for Emeritus' slate of directors at the upcoming Annual
Meeting of ARV Assisted Living, Inc. (Amex: SRS; formerly Nasdaq: ARVI),
scheduled for Wednesday, January 28 at 9:00 a.m., Pacific Time.
ISS, based in Bethesda, Maryland, is the leading independent advisor to several
hundred institutional investors in the areas of proxy contests, corporate
governance and other shareholder-related issues. The ISS report was published
on January 21, 1998.
Emeritus released its proxy materials to ARV shareholders on December 22,
1997, seeking, among other things, to elect nine Emeritus nominees to the ARV
Board who are committed to providing all ARV shareholders with $17.50 per
share in cash by entering into a merger agreement with Emeritus. Emeritus and
EMAC Corp., its wholly-owned subsidiary, on December 19, 1997 commenced a cash
tender offer of $17.50 per share for all outstanding shares of ARV. The
current ARV board is opposed to a merger of Emeritus and ARV, and has
structured and consummated transactions with Prometheus Assisted Living LLC,
an affiliate of Lazard Freres Real Estate Investors (LFREI), that substantially
dilute the ownership of ARV shareholders.
With respect to ARV's current position rejecting Emeritus' offer, ISS said in
its report: "We find it hard to reconcile how the board could have judged a
$16.50- or $17.50-per-share acquisition offer from Emeritus to be inferior to a
$14.00-per-share offer by LFREI, an investment which just as certainly yields a
change in control, though more akin to a creeping tender offer, with no control
premium or consideration paid to shareholders...."
Other comments in the ISS report include the following:
o "ARV has protested the [material adverse change]...and financing
conditions to the bid. These are not atypical covenants in takeover
offers, but ARV has vaulted them to apocalyptic levels."
o "Management's other jabs at alarmism -- the degree of leverage to be
taken on by Emeritus, termination of the lease agreements, and Emeritus'
'weak' financial condition -- are of no consequence to shareholders if
they are cashed out."
o "Management has taken up arms in discrediting the Emeritus offer, in our
view, to deflect attention from the board's own actions with
Prometheus."
o "[The board's] actions can only be viewed as a deliberate attempt to
frustrate Emeritus' proxy contest...The [ARV] board has delivered
shareholders an LFREI fait accompli, and the result is an obstruction
of shareholder suffrage. Threatening as it may be to ARV, it was the
board's very actions that left Emeritus with no other recourse than to
appeal directly to shareholders through its tender offer and proxy
contest."
The report concludes: "[I]f Emeritus loses the board election, shareholders
lose any chance of obtaining its offer. We therefore advocate that
shareholders support [the Emeritus] board slate."
Daniel R. Baty, Chairman and Chief Executive Officer of Emeritus, said: "We are
gratified that ISS has chosen to recommend that ARV shareholders elect our
slate of directors at the upcoming ARV Annual Meeting. If elected, our slate
will act in the best interest of ARV shareholders by effecting a merger with
Emeritus, which will result in a payout of $17.50 per share in cash to every
ARV shareholder. We encourage all ARV shareholders to sign, date and mail to
us the BLUE Emeritus proxy cards in advance of the Annual Meeting."
Emeritus' tender offer and withdrawal rights expire at 5:00 p.m., New York City
time, on January 30, 1998 unless the offer is extended or withdrawn.
Emeritus is a senior housing services company focused on operating
residential-style assisted-living communities. These communities provide a
residential housing alternative for senior citizens who need help with the
activities of daily living. Emeritus currently holds interests in 117
communities representing capacity for more than 11,000 residents in 25 states
and Canada (including a minority interest in Alert Care Corp.). Emeritus'
common stock is traded on the American Stock Exchange under the symbol "ESC."
# # #
Exhibit (a)(13)
[EMERITUS CORPORATION LETTERHEAD]
MORE ABUSES OF SHAREHOLDER RIGHTS
January 22, 1998
DEAR FELLOW SHAREHOLDER:
We thought the ARV directors had done all they could in order to
entrench themselves in office and strip you of an opportunity to receive
$17.50 in cash for each of your ARV shares. We were wrong. ARV's hand-
picked entrenchment partner -- Prometheus Assisted Living LLC -- just
disclosed that it has purchased 1,112,131 ARV shares from two stockholders
in privately negotiated transactions. This means that the Prometheus/ARV
alliance now controls over 55% of ARV's shares, giving them absolute
control of ARV and its board of directors and leaving you with no voice in
the company and no power over your investment except to sell your shares in
the open market at a 17+% discount to our offer (based on yesterday's
closing price for ARV).
However, the battle is not over. We have sued ARV in California
state court seeking, among other things, to rescind the discounted share
issuances to Prometheus, and thus reverse the staggering dilution suffered
by all other ARV shareholders and let you decide whether to accept our
$17.50 offer. Your votes can help. If you want the opportunity to receive
$17.50 for each of your ARV shares, you should vote to replace the ARV
Board by signing, dating and returning the enclosed BLUE Emeritus proxy
card TODAY. A pre-paid Federal Express return envelope is enclosed to
ensure your proxy is received in time to be voted at the January 28th
Annual Meeting.
DON'T TAKE OUR WORD FOR IT -- LISTEN TO ISS
Institutional Shareholder Services, Inc. (ISS) is the preeminent
shareholder advisory firm, and performs independent analyses of thousands
of shareholder meetings each year on behalf of hundreds of institutional
clients including public and private pension funds, insurance companies,
money managers and other fiduciaries. ISS is not affiliated with either
Emeritus or ARV, and both sides made presentations to ISS in connection
with this proxy contest. ISS just completed its analysis of this proxy
contest. Here is what ISS concluded:
o "We find it hard to reconcile how the board could have judged a $16.50 or
$17.50 per-share acquisition offer from Emeritus to be inferior to a $14.00
per-share investment by [Prometheus], an investment which just as certainly
yields a change in control, though more akin to a creeping tender offer,
with no control premium or consideration paid to shareholders."
o "The board should have negotiated with Emeritus, and it did not do so."
o "Management has taken up arms in discrediting the Emeritus offer, in our
view, to deflect attention from the board's own actions with Prometheus.
It implemented a poison pill at the time of the [initial issuance of
shares to Prometheus] because of the presence of the Starwood/Emeritus
offer. It reconfigured [that share issuance] into a convertible note
issuance after Emeritus made its unsolicited $16.50 per-share proposal.
It hastily redeemed the notes in response to Emeritus' proxy
solicitation, giving Prometheus a 39% stake in the company. It set an
exorbitant redemption premium which conveniently yielded the same $14.00
per-share price to Prometheus . . . and a discount to market value. It
delayed the annual meeting and manipulated the record date, allowing
Prometheus to vote the totality of its shares, which are consigned to
vote in favor of the incumbent directors. In short, the board has made
every effort to seal the company's fate with [Prometheus] while spurning
Emeritus' offers."
o "[The board's] actions can only be viewed as a deliberate attempt to
frustrate Emeritus' proxy contest . . . and the result is an obstruction
of shareholder suffrage. Threatening as it may be to ARV, it was the
board's very actions that left Emeritus with no other recourse than to
appeal directly to shareholders through its tender offer and proxy
contest."
o "[I]f Emeritus loses the board election, shareholders lose any chance of
obtaining its offer. We therefore advocate that shareholders support
[the Emeritus] board slate."
--------------------
On December 19, 1997, we commenced our tender offer of $17.50 per
share for all of the outstanding shares of ARV. The offer and withdrawal
rights expire at 5:00 p.m., New York City time, on January 30, 1998, unless
the offer is extended or withdrawn. On December 22, 1997, we released our
proxy materials to ARV shareholders.
The annual meeting is scheduled for January 28th -- just a few days
from now. Vote to take control of your investment in ARV. Vote for
directors who will not block a premium offer for your shares. Vote the
BLUE Emeritus proxy TODAY.
Sincerely,
Emeritus Corporation
If you have questions or need assistance in voting your ARV shares,
please call Emeritus's proxy solicitor, D. F. King & Co., Inc., toll-free at:
1-800-431-9646
