Digging Into the CHS-HMA Deal: Glenview's $396M Payday

This week, Franklin, Tenn.-based Community Health Systems closed on a deal that made it the largest for-profit hospital chain in the country.

In a deal valued at approximately $7.6 billion, CHS acquired Naples, Fla.-based Health Management Associates. CHS now has more than 200 hospitals across 29 states, the most of any system, and it is second only to Nashville, Tenn.-based Hospital Corporation of America in annual revenues.

One of the biggest common denominators in the deal was Glenview Capital Management. The New York City-based hedge fund, run by Larry Robbins, owned significant shares of Health Management, as well as CHS and other major investor-owned hospital operators.

According to a new filing with the Securities and Exchange Commission, the merger led to a hefty payday for Glenview. Glenview owned more than 37.7 million shares of Health Management's common stock. Under terms of the deal, shareholders received $10.50 in cash for every share, meaning the hedge fund cashed in more than $396 million once the ink dried.

In addition, Glenview and Mr. Robbins now hold more than 12 million shares of CHS, or about 10.7 percent of the company.

The American Federation of Teachers and other nurses unions have protested the deal, arguing Glenview had a conflict of interest in the deal. Mr. Robbins spearheaded a campaign last year that resulted in a complete overhaul of Health Management's board and top executive leadership. The hedge fund had consistently criticized Health Management, saying its finances have routinely underperformed and the board and top executives have exhibited "unconstructive" behavior.

More Articles on CHS and HMA:
CHS Completes HMA Acquisition
FTC: CHS Must Sell 2 Hospitals to Complete HMA Deal
HMA Shareholders Approve Merger With CHS

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Articles We Think You'll Like

 

Featured Whitepapers

Featured Webinars