Is HMA Nearing a Takeover?
Over the past two weeks, Health Management has undergone major changes. CEO Gary Newsome announced he will retire from the for-profit hospital chain, effective July 31. This occurred right after Health Management ratified a shareholder rights plan, or a "poison pill," to protect itself from its largest shareholder, New York City-based hedge fund Glenview Capital Management, which recently upped its shares of Health Management to 14.6 percent. However, Glenview executives said they have no plans to acquire Health Management.
Health Management has also been dealing with subpoenas from HHS' Office of Inspector General due to its emergency department admissions practices, which were outlined in a highly publicized "60 Minutes" segment this past December.
The activity swirling around Health Management has led some to believe it will be taken over by another company. Bloomberg interviewed several financial analysts, and some said Franklin, Tenn.-based Community Health Systems is "open to friendly mergers" and could be Health Management's "most logical suitor" as both chains focus on hospitals in rural markets, according to the report.
Health Management owns and operates 71 acute-care hospitals, while CHS has 135 hospitals. A merger would make the new company the largest for-profit hospital chain in the country. CHS last attempted a takeover of a competitor in 2010, when it looked to acquire Dallas-based Tenet Healthcare, resulting in a messy fallout with several lawsuits.
Financial analysts also told Bloomberg that private equity firms could be interested in taking over Health Management, which could potentially fetch a sale price of $8.4 billion.
Officials from Health Management declined to comment to Bloomberg on possible takeover deals, and CHS officials did not respond. Other for-profit hospital companies also did not comment.
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