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To: Logain Ablar who wrote (1317)	6/14/2000 2:19:00 PM
From: John Pitera	Respond to of 2850

Thanks Tim, Here's the article....OHI---Managed Healthcare June 14, 2000 -------------------------------------------------------------------------------- Vulture Investors Are Attempting To Scavenge Health-Care Assets By PETER GRANT Staff Reporter of THE WALL STREET JOURNAL The vultures are circling the carnage in the nursing-home industry.? With some of the largest nursing-home operators under bankruptcy protection and others heading in that direction, a number of deep-pocketed investors are preparing to swoop in on choice morsels. In the largest proposed transaction so far, a unit of Hampstead Group, of Dallas, has offered to make an equity infusion of up to $200 million in Omega Healthcare Investors Inc. The Ann Arbor, Mich., real-estate investment trust owns or has mortgages on about 275 nursing homes and assisted-living facilities in 29 states. Omega shareholders are scheduled to vote July 13 on the deal under which Hampstead would initially pay $100 million for a 44% stake in the company, at $6.25 a share. Omega's stock hit its 52-week high of $26.3125 one year ago; in 4 p.m. New York Stock Exchange composite trading Tuesday, shares closed up 0.0625 cents at $4.9375. Omega management is urging shareholders to approve the plan to ensure that the company can make debt payments coming due in the next seven months. "The events of the last year .. have been unprecedented and disrupted the availability of capital," Chairman and President Essel Bailey Jr. wrote. Eight of the country's top nursing-home companies have filed for Chapter 11 bankruptcy protection in the past two years, including Vencor Inc., of Louisville, Ky., Sun Healthcare Group Inc., of Albuquerque, N.M., and Mariner Post-Acute Network Inc., of Atlanta. Omega is the landlord of many of these companies or holds mortgages on their nursing homes. The bankruptcies are largely the product of the Balanced Budget Act of 1997, which altered Medicare's reimbursement system. Before the change, Medicare paid nursing homes their costs plus a profit. Afterward, the government program specified how much it would pay and how long patients could stay in nursing homes for certain conditions. Investors are pursuing these companies partly because most nursing homes operate at high occupancy levels and the long-term outlook for the business is solid. In another recent "vulture deal," an E.M. Warburg Pincus & Co. affiliate acquired a majority stake in Centennial HealthCare Corp. for $50 million, about one-third the price offered for the company in late 1997. Also, a health-care venture of Chicago investment firm GTCR Golder Rauner purchased the Ohio nursing-home operations of Multicare Cos. for $36.5 million, or about $32,000 per bed. Before 1997, nursing-home companies paid as much as $100,000 per bed, according to Peter Butler, president of Peacock Associates, a Boston-based adviser.