Glenview Says Hospital Co. Board Ousted

Aug 14 2013 | 9:30am ET

Hedge fund Glenview Capital Partners is claiming victory in its proxy battle with Health Management Associates.

The activist hedge fund said that its fellow HMA shareholders had voted to replace the company's current board with its own slate. If it is correct, it would make a sea-change at the hospital operator; current Chairman William Schoen has served in that post since 1986.

Glenview said it expects the new board, to be led by Steven Shulman, to be put in place this week, after the current board reviews the result of the proxy contest.

The hedge fund, which owns 14.6% of HMA, could seek to break off the company's deal to be acquired by Community Health Systems. The $3.9 billion merger price should represent only a floor value for HMA, Glenview said, and that its new board would work to improve HMA's financial results. The company has recently suffered from poor results and is the subject of a number of federal probes—factors which make valuing the company difficult.

Glenview said HMA would take up the Community Health offer in a few months. Community Health made clear it had no intention of abandoning its "definitive agreement to acquire HMA."

"We look forward to working constructively with the new board of directors at HMA to complete this strategic transaction," Community Health spokeswoman Tomi Galin said.

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