HMA Shareholders Vote To Elect New Board

By  //  August 13, 2013

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EDITOR’S NOTE: At the end of July, it appeared that the for-profit healthcare system, Health Management Associates (HMA), owners of Wuesthoff Health Systems with  hospitals in Rockledge and Melbourne, and the Sebastian River Medical Center, would be acquired by Nashville-based Community Health Systems (CHS) with the “deal” expected to close by March 30 of next year, pending approval by 70 percent of Health Management Associates’ shareholders and by regulators.

However, it was reported yesterday that shareholders of HMA have voted to elect eight new directors to the chain’s board, a move instigated and strongly supported by activist investor Glenview Capital Management (GCM), HMA’s largest shareholder. Glenview has made it clear that with this turn of events the negotiations for an acquisition of HMA, which owns 71 health organizations in 15 states, are not over, and that alternative proposals would be considered unless CHS was willing to strengthen their $7.6 billion offer.    

The article excerpted below details Glenview’s aggressive move, and will keep you up to date as the ongoing negotiations for the acquisition of the Brevard and Indian River County hospitals unfolds.

Shareholders of Health Management Associates have voted to elect eight new directors to the chain’s board, activist investor Glenview Capital Management said.

Wuesthoff Health System (Rockledge hospital above) is one of 71 health organizations in 15 states owned and run by Health Management Associates, which is undergoing a complete turn over in their board of directors in the midst of acquisition negotiations with Community Health Systems.

The hedge fund issued a statement saying it has notified HMA that a majority of shareholders have voted to remove and replace the chain’s current board.Glenview has been angling for a change of control at the Naples, Fla.-based chain since May, citing multiple government investigations, earnings that continually came in below expectations and frequent management turnover, among other issues.

HMA has a $3.9 billion offer on the table from Community Health Systems, but Glenview has made clear that it views the offer as a “floor” and that the new board will find ways to strengthen Community’s bid or seek out alternate proposals.

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