SunLink Health Systems, a for-profit hospital network based in Atlanta, announced (pdf) it is offering to purchase thousands of its common shares in an effort to take the struggling company private.
SunLink has offered to purchase all of its common shares held by those who hold 99 or fewer shares, as of Jan. 31, at $1.50 per share. As of Feb. 4, SunLink was trading at $1.26 per share. In addition, SunLink will pay out a $100 bonus to those shareholders.
The company has roughly 9.45 million issued and outstanding common shares across 502 shareholders, but the offer will only impact about 12,000 shares and more than 300 shareholders. SunLink estimates the total purchase price of the offer will be $199,000, which it will pay with cash on hand.
SunLink executives said in the news release the primary driver of the buyout is to reduce the number of shareholders to fewer than 300, which is required in taking a company private. If this offering fails, SunLink said it will "take further actions to reduce the number of record holders of its shares to fewer than 300."
SunLink has been in financial turmoil for several years. In 2006, the for-profit hospital operator's stock was trading at more than $10 per share, but when the recession hit in late 2008, SunLink's stock crashed to as low as $0.60 per share. In the first quarter of its 2013 fiscal year, SunLink lost $1.42 million.
It currently owns and operates only four community hospitals, all of which are "underperforming," according to the news release. SunLink management said it has also engaged advisers to evaluate and possibly sell two of those facilities.
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