Manor Care - The Carlyle Group

Manor Care, Inc (HCR)
The Carlyle Group
$6.3B Going Private

Summary

Private equity firm takes nursing care company private

$67 per HCR share; $6.3B total
HCRstock chart

Announced 7.02.07

Developments

Stockholders approve merger 10.17.07
Proceeding toward closing 11.08.07

Closed 10.17.07

Advisors

Financial

HCR : JPMorgan / Citi
Carlyle : Morgan Stanley / Credit Suisse / Banc of America

Legal

HCR : Cravath Swaine and Moore
Carlyle : Latham & Watkins

Merger Agreement

General

EDGAR filing
Hyperlinked version
Detailed hyperlinked index follows

Article I The Merger

1.01 Merger
1.02 Closing
1.03 Effective Time
1.04 Effects of the Merger
1.05 Certificate of Incorporation and Bylaws
1.06 Directors
1.07 Officers

Article II Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange Fund;
Company Equity Awards

2.01 Effect on Capital Stock
2.02 Exchange Fund
2.03 Company Equity Awards

Article III Representations and Warranties

3.01 Representations and Warranties of the Company

(a) Organization, Standing and Corporate Power
(b) Subsidiaries
(c) Capital Structure
(d) Authority; Noncontravention
(e) SEC Documents
(f) Information Supplied
(g) Absence of Certain Changes or Events
(h) Litigation
(i) Contracts
(j) Compliance with Laws; Environmental Matters
(k) Labor and Employment Matters
(l) Employee Benefit Matters
(m) Taxes
(n) Title to Properties
(o) Intellectual Property
(p) Insurance
(q) Voting Requirements
(r) State Takeover Statutes
(s) Brokers and Other Advisors
(t) Opinions of Financial Advisors
(u) Related Party Transactions
(v) No Rights Plan
(w) No Other Representations or Warranties

3.02 Representations and Warranties of Mergerco

(a) Organization, Standing and Corporate Power
(b) Authority; Noncontravention
(c) Information Supplied
(d) Available Funds
(e) Operations and Assets of MergerCo
(f) Ownership of Company Common Stock
(g) Brokers and Other Advisors
(h) No Other Representations or Warranties

Article IV Covenants Relating to Conduct of Business

4.01 Conduct of Business
4.02 No Solicitation

Article V Additional Agreements

5.01 Preparation of the Proxy Statement; Stockholders
Meeting
5.02 Access to Information; Confidentiality
5.03 Reasonable Best Efforts
5.04 Benefit Plans
5.05 Indemnification, Exculpation and Insurance
5.06 Fees And Expenses
5.07 Public Announcements
5.08 Stockholder Litigation
5.09 Financing
5.10 Restructuring in Connection with CMBS Financing
5.11 Actions with Respect to Existing Debt

Article VI Conditions Precedent

6.01 Each Party
6.02 Mergerco
6.03 Company
6.04 Frustration of Closing Conditions

Article VII Termination, Amendment and Waiver

7.01 Termination
7.02 Effect of Termination
7.03 Amendment
7.04 Extension; Waiver
7.05 Procedure For Termination or Amendment

Article VIII General Provisions

8.01 Nonsurvival of Representations and Warranties
8.02 Notices
8.03 Definitions
8.04 Interpretation
8.05 Consents and Approvals
8.06 Counterparts
8.07 Entire Agreement; No Third-party Beneficiaries
8.08 Governing Law
8.09 Assignment
8.10 Specific Enforcement; Consent to Jurisdiction
8.11 Severability

Proxy Solicitation

Special meeting set for October 17, 2007

Press release 8.31.07

Definitive proxy statement 9.14.07

Table of contents

Preliminary proxy statement 8.06.07

Table of contents

Deal Protection

No shop covenant

Merger agreement 4.2

Proxy statement disclosure

Break-up fee

$250mm, plus out-of-pocket expenses
Agreement 7.2

Proxy statement disclosure

Regulatory Approvals

HSR Act

Merger agreement 5.3

Proxy statement disclosure

Fairness Opinion

JPMorgan fairness opinion

Proxy statement disclosure

Citi fairness opinion

Proxy statement disclosure

Tax Matters

Disclosure

Proxy statement disclosure

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