Magellan Health Inc – ‘SC 13E4/A’ on 9/5/96 re: Magellan Health Inc – EX-11.A

As of:  Thursday, 9/5/96   ·   Accession #:  912057-96-19553   ·   File #:  5-05938

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Amendment to Tender-Offer Statement — Issuer Tender Offer   —   Schedule 13E-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13E4/A   Amendment to Tender-Offer Statement -- Issuer          8     46K 
                          Tender Offer                                           
 2: EX-11.A     Exhbit (A)(11)                                         4±    19K 
 3: EX-12.A     Exhibit (A)(12)                                        1      6K 
 4: EX-12.B     Exhibit (B)(12)                                        5     18K 

EX-11.A   —   Exhbit (A)(11)

EX-11.A
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SUPPLEMENT TO OFFER TO PURCHASE DATED AUGUST 15, 1996 

MAGELLAN HEALTH SERVICES, INC.

HAS INCREASED ITS 
OFFER TO PURCHASE FOR CASH TO 3,300,000 SHARES OF ITS COMMON STOCK
FROM 1,891,891 SHARES OF ITS COMMON STOCK 

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND
WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME ON WEDNESDAY, SEPTEMBER   
18, 1996, UNLESS THE OFFER IS EXTENDED.                                         

Magellan Health Services, Inc., a Delaware corporation (the "Company"), 
pursuant to this Supplement is increasing the number of Shares that it will     
accept pursuant to the Offer to 3,300,000 Shares from 1,891,891 Shares and is   
extending the expiration date of the Offer to 12:00 Midnight, New York City time
on Wednesday, September 18, 1996, unless the Offer is extended. Capitalized     
terms used but not defined in this Supplement shall have the meanings assigned  
to such terms in the Offer to Purchase dated August 15, 1996.                   

--------------------------

    Holders who have previously tendered their Shares pursuant to the Offer need
not take any further action to tender their Shares. Holders who have not        
tendered their Shares pursuant to the Offer may continue to use the Letter of   
Transmittal to tender Shares.                                                   
--------------------------

THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING    
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE       
SECTION 6 OF THE OFFER TO PURCHASE.                                             
--------------------------

    The Shares are listed and principally traded on the American Stock Exchange,
Inc. (the "AMEX") under the symbol "MGL". On September 4, 1996, the closing per 
Share sales price as reported on the AMEX Composite Tape was $17.125.           
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE  
SECTION 7 OF THE OFFER TO PURCHASE. The Company has been informed by the        
Depositary that approximately 224,000 Shares have been tendered and not         
withdrawn as of September 4, 1996. The 3,300,000 Shares that the Company is     
offering to purchase pursuant to the Offer represent approximately 10.0% of the 
Shares outstanding as of July 31, 1996.                                         

--------------------------

  NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. THE      
COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY   
INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR
OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND 
THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED.                         

--------------------------

   If the Company were to purchase 3,300,000 Shares pursuant to the Offer at a
Purchase Price of $18.50 per Share (the highest price in the range of possible  
purchase prices), the maximum aggregate cost of the Offer would be approximately
$61.8 million (which includes $700,000 in transaction costs), which would be    
paid either from borrowings under the Company's Credit Agreement or a           
combination of borrowings and cash and cash equivalents of the Company.         
--------------------------

  EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT, THE TERMS AND CONDITIONS
SET FORTH IN THE OFFER TO PURCHASE REMAIN APPLICABLE IN ALL RESPECTS TO THE     
OFFER. THE INFORMATION SET FORTH HEREIN SHOULD BE READ IN CONJUNCTION WITH THE  
OFFER TO PURCHASE.                                                              
--------------------------

Questions and requests for assistance may be directed to, and additional
copies of this Supplement, the Offer to Purchase, the Letter of Transmittal or  
the Notice of Guaranteed Delivery may be obtained from, the Information Agent,  
MacKenzie Partners, Inc., at (212) 929-5500 (call collect) or (800) 322-2885    
(toll-free).                                                                    

--------------------------

THE DEALER MANAGER FOR THE OFFER IS:

[DEAN WITTER REYNOLDS LOGO] 

September 5, 1996                                                               

EX-11.A
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SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION

    The following summary unaudited consolidated pro forma financial information
gives effect to the purchase of the Shares pursuant to the Offer based on       
certain assumptions described in the Notes to Summary Unaudited Consolidated Pro
Forma Financial Information and gives effect to the purchase of the Shares      
pursuant to the Offer as if it had occurred on October 1, 1994 with respect to  
the statement of operations data and on September 30, 1995 and June 30, 1996    
with respect to the balance sheet data. The summary unaudited consolidated pro  
forma financial information should be read in conjunction with the summary      
consolidated historical financial information and does not purport to be        
indicative of the results that would actually have been obtained had the        
purchase of the Shares pursuant to the Offer been completed at the dates        
indicated or that may be obtained in the future.                                

                                                        [Enlarge/Download Table]

                                         YEAR ENDED SEPTEMBER 30, 1995               NINE MONTHS ENDED JUNE 30, 1996      
                                   ------------------------------------------  -------------------------------------------
                                                         PRO FORMA                                    PRO FORMA           
                                               ------------------------------               ------------------------------
                                               ASSUMED $18.50  ASSUMED $16.50               ASSUMED $18.50  ASSUMED $16.50
                                                 PER SHARE       PER SHARE      UNAUDITED     PER SHARE       PER SHARE   
                                   HISTORICAL  PURCHASE PRICE  PURCHASE PRICE  HISTORICAL   PURCHASE PRICE  PURCHASE PRICE
                                   ----------  --------------  --------------  -----------  --------------  --------------
                                                     (IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)                  
                                                                                                                          
STATEMENT OF OPERATIONS DATA:                                                                                             
Net revenue....................... $1,151,736    $1,151,736      $1,151,736     $ 996,997     $  996,997      $  996,997  
Net income (loss).................    (42,963)      (45,898)        (45,584)       24,095         22,051          22,270  
Net income (loss) per common                                                                                              
 share............................ $    (1.54)   $    (1.87)     $    (1.86)    $    0.79     $     0.81      $     0.82  
Average number of shares                                                                                                  
 outstanding......................     27,870        24,570          24,570        30,559         27,259          27,259  
Ratio (deficiency) of earnings                                                                                            
 before fixed charges to fixed                                                                                            
 charges.......................... $  (54,085)   $  (58,977)     $  (58,454)         1.93           1.81            1.82  

                                                        [Enlarge/Download Table]

                                             AS OF SEPTEMBER 30, 1995                       AS OF JUNE 30, 1996            
                                    -------------------------------------------  ------------------------------------------
                                                           PRO FORMA                                   PRO FORMA           
                                                 ------------------------------              ------------------------------
                                                 ASSUMED $18.50  ASSUMED $16.50              ASSUMED $18.50  ASSUMED $16.50
                                                   PER SHARE       PER SHARE     UNAUDITED     PER SHARE       PER SHARE   
                                    HISTORICAL   PURCHASE PRICE  PURCHASE PRICE  HISTORICAL  PURCHASE PRICE  PURCHASE PRICE
                                    -----------  --------------  --------------  ----------  --------------  --------------
                                                           (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                        
                                                                                                                           
BALANCE SHEET DATA:                                                                                                        
Working Capital...................   $  91,413     $   91,413      $   91,413    $  115,029    $  115,029      $  115,029  
Total Assets......................     983,558        983,558         983,558     1,170,187     1,170,187       1,170,187  
Total assets less goodwill and                                                                                             
 reorganization value in excess of                                                                                         
 amounts allocable to identifiable                                                                                         
 assets...........................     943,564        943,564         943,564     1,041,319     1,041,319       1,041,319  
Long-term debt and capital lease                                                                                           
 obligations......................     538,770        600,520         593,920       532,100       593,850         587,250  
Stockholders' equity..............      88,560         26,810          33,410       185,715       123,965         130,565  
Book value per common share.......        3.17           1.09            1.36          5.72          4.25            4.48  

------------------------                                                        
NOTES TO SUMMARY UNAUDITED CONSOLIDATED PRO FORMA INFORMATION                   

  The following assumptions regarding the Offer were made in determining the
pro forma financial information:                                                

(1) The information assumes 3,300,000 Shares are purchased at $16.50 per share  
 and $18.50 per share with the purchase being financed under the Company's
   Credit Agreement bearing interest at 7.92% in fiscal 1995 and 7.48% for the
nine months ended June 30, 1996.                                        

(2) Expenses directly related to the Offer are assumed to be $700,000 and are   
included as part of the cost of the Shares acquired.                    

(3) The ratio (deficiency) of earnings before fixed charges to fixed charges    
were computed by dividing pre-tax income before fixed charges by fixed  
charges. Fixed charges consist of interest expense and the interest     
component of operating leases.                                          

(4) Book value per common share is calculated as total stockholders' equity     
   divided by the number of common shares outstanding, net of treasury shares,
at the end of the period.                                               

                                  MAGELLAN HEALTH SERVICES, INC.

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 13E4/A’ Filing		Date		First		Last			Other Filings
		9/18/96		1					SC 13E4/A
Filed on:		9/5/96		1
		9/4/96		1
		8/15/96		1					SC 13E4
		7/31/96		1
		6/30/96		2					10-Q
		9/30/95		2					10-K,  10-K/A
		10/1/94		2
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