Two board members of Dallas-based Tenet Healthcare who work at Glenview Capital Management resigned last week, which could lead to an activist campaign at Tenet.
The two hedge fund employees, Randy Simpson and Matt Ripperger, stated in a letter to Tenet's board that they stepped down "due to irreconcilable differences regarding significant matters impacting Tenet and its stakeholders." The two said efforts to find a mutually agreeable strategy to turn Tenet's performance around have been "fully exhausted," according to The Street.
In an agreement executed in January 2016, Tenet put Mr. Simpson and Mr. Ripperger on its board in exchange for Glenview agreeing not to up its stake in Tenet beyond 25 percent or join efforts by other investors to oust Tenet's management or force a sale of the company, according to the report.
The expiration of the restrictive standstill agreement was triggered when Mr. Simpson and Mr. Ripperger stepped down from Tenet's board. When the agreement expires in less than two weeks, "Glenview may evaluate other avenues to be a constructive owner of Tenet," Mr. Simpson and Mr. Ripperger stated in their letter.
Tenet ended the second quarter of this year with a net loss of $56 million, compared to a net loss of $44 million in the same period of the year prior.
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