Genesis HealthCare Announces Merger Agreement at Higher Price

Genesis HealthCare Corporation announced that it has amended its merger agreement with a venture between affiliates of Formation Capital, LLC (“Formation”) and JER Partners (“JER”) to increase the consideration payable to Genesis shareholders to $65.25 per share in cash from $64.25 per share. Under the amended agreement, if the transaction is not completed prior to July 31, 2007, the purchase price will increase by 9% per annum, or $0.01609 per day, beginning July 31, 2007 until the transaction closes.

The increased price values the transaction at approximately $1.77 billion, including the assumption of approximately $475 million in debt, and represents a premium of approximately 35.8% over the average closing price for GHC common stock over the 30 days prior to announcement of the transaction in January 2007.

Both a Special Committee of the Board consisting solely of independent, outside directors and the full Board of Directors of Genesis have unanimously approved the amended merger agreement and unanimously recommend that shareholders vote in favor of the Formation/JER transaction.

The Special Committee and the Board of Directors also determined that the previously announced proposal from Fillmore Capital Partners, LLC to acquire all outstanding common shares of Genesis for $65.25 per share in cash, increasing at 6% per annum beginning on August 15, 2007, was not superior to the amended Formation/JER transaction.