Glenview Capital Management, a New York City-based hedge fund, has filed documents with the Securities and Exchange Commission urging Naples, Fla.-based Health Management Associates to toss out or amend its recently ratified shareholder rights plan, better known as a "poison pill."
In May, Health Management approved the 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.
Within the poison pill, Health Management included a 15 percent trigger, meaning if any shareholder acquired an ownership stake of 15 percent or higher, other shareholders would be protected and could potentially buy new shares for a steep discount.
According to the SEC documents, Glenview executives urged Health Management to either remove the poison pill, "or at a minimum," amend it so the trigger would be 25 percent ownership instead of 15 percent. This move comes despite the fact Glenview executives said they had no ambition of acquiring Health Management.
Since Health Management filed the poison pill May 24, its shares have risen more than 26 percent, standing at $15.15 as of 10 a.m. EDT. Health Management has also undergone major changes, announcing CEO Gary Newsome will retire from the chain July 31 and scaling back benefits for its 42,000 employees. The recent news has led some financial analysts to speculate Health Management is nearing a takeover by another for-profit hospital chain or a private equity firm.
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