Yesterday, Naples, Fla.-based Health Management Associates said it would approach its largest shareholder, New York City-based hedge fund Glenview Capital Management, to add Glenview's nominees to the board of directors. However, Glenview declined the sitting board's proposal, saying it wanted all shareholders to determine board composition.
Over the past several weeks, Glenview has made a concerted effort to replace the entire board of Health Management with eight nominees of its own. Glenview executives have said the current for-profit hospital board has been "substandard," has led to financial and legal issues and generally has "misaligned" priorities with those of shareholders.
Health Management came forward with an olive branch, saying it would immediately add Glenview's nominees to the current board and have one of the nominees become board chairman. Health Management's board said it pitched the combined board model to give the company "continuity" as it goes through several government investigations, a CEO transition and a pending merger with Franklin, Tenn.-based Community Health Systems.
Glenview "respectfully declined" Health Management's offer. The hedge fund, owned by Larry Robbins, said it stands by its original rationale to replace the entire board, and it wants to wait for the results of its consent solicitation with other shareholders. "The case for a complete change of the board is clear, and the democratic process for shareholders to vote is well under way," Glenview's statement read. "We believe the best and only settlement of the issue is to count the votes as they come in and allow shareholders' voices to be heard."
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