ARV says the price reflects a premium of approximately 53% over the $2.55 closing price of its common shares on Sept. 20, 2002, the last trading day before the company's announcement that it had received a preliminary proposal from Prometheus.

The ARV board has unanimously approved the transaction, on which it was advised by Cohen & Steers Capital Advisors LLC, and the deal will now go to a special meeting of stockholders for a vote.

Prometheus currently owns approximately 43.5% of ARV's outstanding shares and its affiliate holds a warrant, which if exercised, would result in Prometheus and its affiliates together owning approximately 45.8% of the ARV shares.

In a related development, ARV and Prometheus say they have reached agreements with respect to settlements of the stockholder class action lawsuits that were filed in the Delaware Court of Chancery and in the California Superior Court in Orange County shortly after the announcement of Prometheus' preliminary proposal. The settlements are subject to court approval.

Prometheus has indicated that it intends to combine ARV with assisted living companies Atria Inc. and Kapson Senior Quarters Corp., subject to regulatory approvals. ARV's stock stood at $3.75 near noon Monday, even for the day and four cents below its 52-week high of $3.80, achieved Jan. 6.