This morning, Team Health Holdings LLC (NYSE:TMH) filed an 8-K indicating that two of its board members announced their resignations on July 2, 2013 to pursue other opportunities. The former TMH board members – Steven Epstein and Earl Holland – cited no “disagreement with the company on any matter relating to its operations, policies or practices”. What is most interesting about these two former board members is that they are on the nine-board member slate being put forth by Glenview Capital in its consent solicitation to remove and replace all current Health Management Associates Inc (NYSE:HMA) board members.



 Team Health Holdings LLC (NYSE:TMH) Resignations only seems to make sense if the individuals have high degree of confidence in Glenview’s success for its consent solicitation

See Larry Robbins’ Glenview Capital Attempts A Shakeup of HMA Board

Mr. Epstein and Mr. Holland serve on other corporate boards, but they clearly seem to be freeing themselves of obligations at TMH in the event Glenview is successful with its proposals. Given that they each earned $160K to $170K serving on Team Health Holdings LLC (NYSE:TMH)’s board in 2012 (according to TMH’s proxy filing), there is an opportunity cost to resigning before knowing whether Glenview’s consent solicitation is a definitive success. Therefore, some believe that this new data point is that there seems to be a high degree of confidence by Epstein and Holland in the likelihood of success Glenview’s consent solicitation. Based on the typical SEC review, from a timing perspective, the voting process could play out over the next 30 days.

Darren Lehrich, research analyst, Deutsche Bank puts ‘a high probability of success on Glenview’s democratic process based on feedback’ they have received from other HMA shareholders.

See Glenview Capital’s Alternative Slate of Directors for HMA Could Take Two Weeks or Three Months

In a new note today Darren states:

If Glenview is successful, we think the new independent board would follow Glenview’s framework for a path forward with: (1) an operational review; and (2) a financial and strategic alternatives review. We believe the timeline for those parallel paths could take an additional 3-6 months, or perhaps slightly longer. Glenview outlined these parallel paths in detail on p. 36 of its presentation to Health Management Associates Inc (NYSE:HMA) shareholders from June 13, 2013, which can be found on its website