Glenview Capital says ISS backs HMA takeover bid
Glenview Capital says ISS backs its plan to replace board of hospital operator HMA
A prominent proxy advisory firm is supporting a push from a key Health Management Associates Inc. shareholder to replace the hospital operator's board of directors.
Glenview Capital Management LLC, which holds a 14.6 percent stake in HMA, said in June that it wants to replace the hospital operator's current board with its own nominees, a move it says will increase value for investors. The shareholder has said it sees significant room for improvement at the company.
Glenview said Friday that Institutional Shareholder Services Inc. supports its plan to elect eight nominees to the board.
"We appreciate that ISS is part of the broad and growing chorus of voices calling for complete change at HMA," the shareholder said in a statement.
HMA, in turn, said it "strongly" disagreed with the ISS recommendation to remove all of its board members. The Naples, Fla., company said it would support immediately adding Glenview's nominees to its board and even making one of them chairman. But it also wants to retain two or three board members to ensure continuity and an orderly transition.
ISS representatives did not immediately return calls seeking comment.
HMA is being eyed for a $3.9 billion takeover by fellow hospital operator Community Health Systems Inc.
Community Health, based in Franklin, Tenn., said last month it plans to pay a combination of cash and stock valued at $13.78 for each share of its fellow hospital operator. It also will make an additional payment of up to $1 per share depending on how some government investigations into HMA play out.
HMA has received subpoenas from the U.S. Department of Health and Human Services, Office of the Inspector General, regarding physician relationships and some emergency-room operations.
It said its board believes continuity is important, given the Community Health offer, the government investigations and a management transition. It runs 71 hospitals in 15 states, mostly in the Southeast and Texas.
Shares of HMA climbed a penny to $13.27 Friday afternoon, while the Standard & Poor's 500 index fell slightly. HMA shares have traded between $6.53 and $17.28 over the past year.
