Health Management Associates is under fire from an activist investor, but a change of ownership at the company may be little more than wishful thinking.
After two difficult quarters, the company's largest shareholder, Glenview Capital Management, is pushing for a new direction. It has ruled itself out as a buyer—which leaves the option of installing new management that will right the ship or finding a partner that will do so.
Changes are already underway at the Naples, Fla.-based chain, which operates 71 hospitals primarily in the Southeast, after being notified by Glenview that it wanted to “engage in communications” with management, the board and other investors about “ways to enhance shareholder value.” The $9.5 billion investment fund, which focuses heavily on healthcare companies, also has filed for antitrust approval to acquire up to $2.2 billion in stock or roughly 75% of the company.
HMA responded by steeling itself against a potential takeover by adopting a “shareholder rights plan” that would go into effect if any entity tried to acquire more than 15% of its shares. Glenview currently holds 14.6%.