Glenview Capital Management LLC said it has no intention to acquire the hospital operator, Health Management Associates Inc (NYSE:HMA), after the latter’s recent adoption of a shareholder rights plan.
Last Friday, the Board of Directors of Delaware-based Health Management Associates Inc (NYSE:HMA) adopted a shareholder rights plan, popularly known as a poison pill, with a 15 percent trigger after the New York-based hedge fund reported in its Schedule 13D filing that it holds about 14.6 percent holding in HMA.
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
Glenview’s Schedule 13D filing
The hospital operator indicated that in light of Glenview’s Schedule 13D filing, as well as its filing under the Hart-Scott-Rodino Antitrust Improvements Act, (HSR Act), Health Management Associates Inc (NYSE:HMA)’s board determined to implement the Rights Plan. HMA’s board said it believes that the Rights Plan will help promote the fair and equal treatment of all stockholders of the HMA and ensures that the board remains in the best position to discharge its fiduciary duties to the HMA and its stockholders. The board further indicated that the Rights Plan adopted by it has a short one-year term and a 15 percent threshold, reflecting the board’s effort to balance these concerns with best corporate governance practices.
The hedge fund on Tuesday said it converted its Schedule 13G filing to a 13D on May 6 in order to be in a position to acquire additional shares of Health Management. It said it will continue to hold private discussions with the company.
The hedge fund Glenview has further indicated that under HSR requirements, each investment fund within its fund family is required to make its own HSR filing. Each fund may file to acquire up to a maximum of $141.8 million, $709.1 million or a greater amount in Health Management Associates Inc (NYSE:HMA) voting shares. Glenview further disclosed that due to the size of its funds and the proximity of their present ownership stake to the thresholds, three of their funds filed for the higher authorization size of up to $709.1 million and one filed for authorization of up to $141.8 million, thus adding up to $2.2 billion of stock.
However the hedge fund clarified that though a simple math could add up to the maximum threshold limits, Glenview has no present intention or future plan to buy either $2.2 billion of stock or 75 percent of Health Management Associates.
The hospital operator earlier reported that it had received a subpoena from the securities regulator Securities and Exchange Commission. HMA also reported a 39 percent fall in its first-quarter earnings on the back of flat revenues and higher expenses.
Health Management Associates Inc (NYSE:HMA) reported that the subpoena sought documents related to contractual adjustments, accounts receivable, billing write-downs, besides accounts receivable aging and revenue from Medicare.