GranCare, Living Centers Plan Merger

GranCare Inc. and Living Centers of America Inc. plan to merge in a $1.8-billion transaction that gives Leon Black’s Apollo Management a big stake in the combined company. Under the agreement, shareholders of Houston-based Living Centers would receive $40.50 a share in cash, and Apollo would pay $200 million for 4.94 million newly issued shares of Living Centers. After Apollo’s investment, GranCare and Living Centers would merge to form a company with annual revenue of about $1.9 billion. Living Centers stock rose $1.25 to close at $37.75 and GranCare shares climbed $1 to close at $8.75, both on the NYSE.