And Glenview Prevails: HMA Shareholders Vote to Oust Current Board

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The battle between Naples, Fla.-based Health Management and New York City-based hedge fund Glenview Capital Management hit a culminating point, as a majority of Health Management shareholders voted to remove and replace the company's current board of directors.

GlenviewCapitalThe successful consent solicitation for Glenview means its eight nominees will comprise the new board as early as this week. In a statement, Health Management said it has sent the votes to an independent auditor to verify the results. Steven Shulman — an executive with several years of experience in managed care and other healthcare ventures — will become the new board chairman, replacing William Schoen, who has chaired Health Management's board since 1986.

Glenview, a $6 billion firm run by prominent investor Larry Robbins, has been pushing for a complete board overhaul at Health Management since May. Glenview has consistently criticized Health Management, saying its finances have routinely underperformed and that the board and top executives have exhibited "unconstructive" behavior.

Last week, Health Management turned in another poor quarter, as its profit was down more than 80 percent on low admissions and high costs associated with government investigations.

As Health Management potentially undergoes a massive change in board leadership, it also is in the process of merging with Franklin, Tenn.-based Community Health Systems in a deal worth $7.6 billion, $3.9 billion of which is in cash and stock. Glenview executives have viewed the deal as an "important floor value" for Health Management shareholders. In a statement, the hedge fund said it will consider the merger "with an eye towards maximizing shareholder value and positioning HMA to best serve the healthcare needs of its local communities" after the new board is in place.

More Articles on Glenview and HMA:
HMA Meets Poor Projections, Q2 Profit Tumbles 80%
Hedge Fund Glenview Turns Down HMA's "Hybrid Board" Proposal
9 Things to Know About the CHS-HMA Merger

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