Tenet reaches deal with Glenview, implements additional governance changes

Dallas-based Tenet Healthcare announced March 26 that its board of directors reached an agreement with Glenview Capital Management, Tenet's largest shareholder, regarding proposed changes to Tenet's bylaws.

Here are seven things to know.

1. Under the agreement, Glenview has withdrawn a proposal to amend Tenet's bylaws to allow all shareholders to take action by written consent without a meeting.

2. As part of the deal, Tenet implemented several changes to its corporate bylaws, which now require the company to hold its annual meeting at least every 13 months. Under the changes, the special meeting and annual meeting bylaws can only be modified by a vote from shareholders representing a majority of the outstanding common stock.

3. Tenet is also adding a shareholder rights plan bylaw, which states approval from 75 percent of the board of directors is needed to adopt any future shareholder rights plan. Any future plan must be limited to one year plus a 90-day period to solicit shareholder approval of any longer duration, according to Tenet.  

4. Under the deal, Glenview agreed to vote its shares in favor of all of Tenet's board's nominees and support the board's proposals at Tenet's 2018 annual meeting of shareholders.

5. The deal comes after Glenview sent a letter to Tenet shareholders in February stating Tenet has been a "chronically underperforming company for decades," and shareholders need the ability to take action by written consent.

6. "We are pleased to have reached this constructive agreement with Glenview, which demonstrates our ongoing commitment to listening to our shareholders and incorporating their feedback as part of our efforts to strengthen our corporate governance practices," Ronald A. Rittenmeyer, executive chairman and CEO of Tenet, said in a news release.

7. "As a long-term shareholder of Tenet and as its largest investor, we firmly believe in the company's value creation opportunities and we appreciate steps taken in recent months to enhance Tenet's focus on patient satisfaction, operating efficiency, incentive alignment and corporate governance," Larry Robbins, founder and CEO of Glenview, said in a news release. "We are pleased that these bylaw amendments will benefit all shareholders by providing greater shareholder safeguards and an improved framework for a continuing constructive dialogue between the Board, senior management and owners."

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