Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Finance
June 25, 2013 01:00 AM

Activist investor seeks to oust HMA board

Beth Kutscher
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The activist investor pushing for a shake-up of Health Management Associates is attempting to install a new board of directors that's potentially more supportive of selling the company.

    Not to be outdone by the news that two publicly traded hospital chains have agreed to a merger, hedge fund Glenview Capital Management has embarked on its own public relations campaign, reaching out to the news media and shareholders and setting up a website, Revitalize HMA.

    New York City-based Glenview also filed a proxy statement today with the U.S. Securities and Exchange Commission to nominate a slate of eight directors to HMA's board—a complete overhaul of the company's leadership team. HMA's current board of nine, which includes outgoing President and CEO Gary Newsome, has been chaired by William Schoen since April 1986.

    In its materials to shareholders, Glenview has tried to paint itself as a long-term investor that was forced to become activist because of the “situational dynamics” at HMA and an “insular and stale” board.

    A slide presentation making the case for new directors cites a “lost decade” at the company, in which it underperformed its peers by 104%.

    Glenview also pointed to other factors including two pending Justice Department investigations and an SEC investigation, as well as frequent management turnover. With Newsome's departure, HMA will install its fifth CEO in 13 years.

    Yet Glenview, which did not include a representative from its own firm among its board nominees, said it's not necessarily pushing for a takeover.

    “In our communications with the company, we have not asked HMA to definitively sell themselves to the highest bidder, nor have we recommended that they ignore such possibilities,” the hedge fund said in a open letter to shareholders (PDF).

    Yet it pointed out that HMA's board refused to engage in discussions with private-equity firms that were interested in buying the company six years ago.

    With HMA's current board seen as “unwelcoming of and unfriendly towards” a deal, “a highly qualified reconstituted board ensures that any sale process be professional and cooperative and therefore likely to surface maximum value should such value be attainable through strategic combination.”

    HMA issues response

    In response to the filing, HMA issued a brief statement. “HMA's board of directors recently engaged Morgan Stanley to assist with its ongoing consideration of strategic alternatives and opportunities available to HMA,” it said. “HMA's board of directors is reviewing Glenview's filings and will respond in due course.”

    Glenview's proposal still needs to receive clearance from the SEC, a process that could take up to 20 days. Once that occurs, shareholders will have up to 60 days to cast their votes for the board nominees.

    A new board would take office once the nominees receive approval from 50.1% of the outstanding shares. Shareholders can elect the entire slate of directors or any number of nominees individually.

    Glenview, which currently owns 14.6% of the Naples, Fla.-based chain, signaled its intention to take a more active role in shaking up the company in early May. Later that month, it also filed for antitrust approval to acquire up to $2.2 billion in shares.

    HMA has attempted to ward off any takeover by adopting a “poison pill” that would go into effect if any one shareholder tried to acquire more than 15% of the company. At the same time, it assembled a team of advisers and said it was in the midst of reviewing “strategic alternatives.”

    Follow Beth Kutscher on Twitter: @MHbkutscher

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    GenesisCare files for Chapter 11 bankruptcy, seeks to offload U.S. operations
    GenesisCare files for Chapter 11 bankruptcy, seeks to offload U.S. operations
    bankruptcy 2
    Friday Health Plans shutting down amid financial shortfall
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing