Last week, Glenview Capital Management, a New York City-based hedge fund and the largest shareholder of Naples, Fla.-based Health Management Associates, nominated a ninth person to become a board member of Health Management.
Glenview executives said JoAnn Reed, a former CFO of Medco Health Solutions, should take the ninth slot on Health Management's new hypothetical board. The proposal comes roughly two weeks after Glenview wrote a letter to other Health Management shareholders, demanding the for-profit hospital operator remove and replace the current board with "eight highly qualified, independent, newly elected directors."
Glenview, which is controlled and managed by major Wall Street player Larry Robbins, has blasted Health Management's current financial structure and culture, saying Health Management "has fallen short in their financial returns delivered to shareholders, their financial management and focus, our shared aspirational goals on regulatory compliance and the pursuit of a stable and effective leadership team." This even prompted Glenview to create a new website, Revitalize HMA, on ways to improve the chain and replace leadership.
Health Management has since fired back in a letter to shareholders, saying Glenview's calls for action have been inappropriate given shareholders had just elected board members at the annual meeting. Health Management's letter went on to say:
"In our view, Glenview's actions are an unnecessary distraction to [HMA's] strategic review process and an attempt to advance its own agenda for [HMA] with its hand-picked nominees…please do not allow Glenview's efforts to disrupt this process."
In May, Health Management approved a poison pill, which essentially prevents the hostile takeover of a publicly traded company by a large shareholder. Glenview is the biggest shareholder of the for-profit hospital company with roughly 37.8 million shares, or 14.6 percent of Health Management's stock.
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