HMA Moves to Block Takeover Attempt

Health Management Associates has adopted a shareholders' rights plan to protect the hospital operator and its stockholders from efforts by Glenview Capital Management to obtain control of the company.

Health Management Associates, Inc. has launched a shareholders' rights plan that the investor-owned hospital chain says is needed to block a potential takeover.

In a Securities and Exchange Commission filing Friday Naples-based HMA said the board of directors adopted the rights plan to thwart efforts by Glenview Capital Management LLC to gain control.

"The rights agreement is intended to protect the Company and its stockholders from efforts to obtain control of the Company that the Board of Directors determines are not in the best interests of the Company and its stockholders, and to enable all stockholders to realize the long-term value of their investment in the Company," HMA said in the filing.

Glenview owns 14.56% interest in HMA common stock but filed a 13D filing with the SEC on May 6 suggesting that it would increase its ownership stake and "may engage in communications with relevant parties regarding the company and ways to enhance shareholder value, including, but not limited to, the Company's management, members of the board of directors, shareholders or other investors, potential strategic partners, financial advisers and other industry participants."

HMA noted in its filing on Friday that a Hart-Scott-Rodino Antitrust Improvement Acts was also filed on May 22 by affiliates of Glenview which "indicates that these affiliates presently intend to acquire, collectively, up to approximately $2.2 billion of the Corporation's outstanding common stock."

"In light of Glenview's Schedule 13D filing, as well as its filing under the HSR Act, the Board of Directors determined to implement the Rights Plan," HMA said in its filing. "The Board of Directors believes that the Rights Plan will help promote the fair and equal treatment of all stockholders of the Corporation (not just Glenview) and ensures that the Board of Directors remains in the best position to discharge its fiduciary duties to the Corporation and its stockholders. The Rights Plan adopted by the Board of Directors, which has a short one-year term and a 15% threshold, reflects the Board of Directors' effort to balance these concerns with best corporate governance practices."

HMA operates 71 general acute care hospitals in small- to mid-sized markets in 15 states with approximately 11,500 licensed beds, more than 42,000 employees and a medical staff of 10,000 physicians.

HMA was the subject on an unflattering report on 60 Minutes last December alleging that the company pressured physicians to admit patients regardless of their medical needs in order to boost profits. Producers for 60 Minutes "talked to more than 100 current and former employees." HMA denied the allegations.