The largest shareholder of Naples, Fla.-based Health Management Associates is continuing its campaign to replace the for-profit hospital company's current board of directors with its own nominees amidst a massive merger shakeup.
Glenview Capital Management is the New York City-based hedge fund that owns 14.6 percent of Health Management. The group said Health Management's recent announcement to merge with Franklin, Tenn.-based Community Health Systems represents an "important floor value" for Health Management shareholders.
However, Glenview cautioned that Health Management's poor second-quarter earnings preview, legal troubles and leadership transitions make it "difficult to assess whether the value offered in the [CHS] proposal represents full and fair value or represents the price offered by an opportunistic acquirer to a distressed seller," according to a statement.
Health Management expects to miss its original earnings guidance in the second quarter for the eighth time in the past 11 years. Glenview said Health Management "lacks the communication and analytical skills to bridge budget versus actual results to provide appropriate transparency to owners."
Glenview and Health Management have been battling since May, when Health Management approved a poison pill to prevent Glenview from grabbing a majority stake in the company. Glenview has consistently criticized Health Management's leadership, in particular the board and CFO Kelly Curry, and has called on shareholders to vote in favor of the new board nominees by Aug. 19.
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