ARV Sells $60 Million in Convertible Notes

ARV Assisted Living Inc. said it sold $60 million in convertible notes to an affiliate of Lazard Freres & Co., allowing the New York investment firm to boost its stake in the elder-care company to 28.2%. The transaction supplants an earlier agreement for Lazard to buy up to 49.9% of Costa Mesa-based ARV for $14 a share, or $135 million. That deal was subject to shareholder approval. The new transaction also lessens the chances that Seattle-based Emeritus Corp. will prevail in a $16.50-a-share bid that was rejected earlier last month. The notes are convertible into about 3.5 million shares of ARV common stock at $17.25 a share. Together with Lazard’s earlier purchase of 1.9 million ARV shares, the new investment would give it a total stake of 28.2%. ARV operates 49 assisted-living communities, most of them in California. Shares were unchanged on Nasdaq at $15.