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Fight to Replace HMA Board Continues as Buyer Steps Forward

Margaret Dick Tocknell, for HealthLeaders Media, July 31, 2013

The filing also noted that "the misalignment of Board and shareholder priorities has led to the misapplication and poor construction of management incentives, a myopic focus on acquisitions to the exclusion of higher returning share repurchase alternatives, and a failure to attract strong stable senior management."

Glenview has nominated a new board, collectively called the "Fresh Alternative" and characterized as "highly qualified and independent," and filed the necessary written consent to give HMA shareholders of record as of July 18 until Sept. 18 to vote for the board nominees.

It keeps stockholders up to date on its efforts through its Revitalize HMA website.

In a press statement confirming that it will continue to call for a new HMA board, Glenview officials noted that over the course of several announcements on Tuesday HMA confirmed lower-than-expected earnings and the receipt of four additional subpoenas from the Office of the Inspector General at the Department of Health and Human Services as part of an ongoing investigation into HMA's patient admission practices.

"HMA lacks the financial acumen to deliver on its projections," according to the press statement, which also ties HMA's legal and regulatory challenges "to a lack of focus at the board level on quality and compliance."

In light of the acquisition announcement, there was some thought that Glenview, which holds stock in both of the for-profit hospital systems––14.6% of HMA stock and 9.6% of CHS stock—might step back and "take a bird in the hand," says CRT Capital Group analyst Sheryl Skolnick. The $3.9 billion deal calls for HMA stockholders to receive $13.78 per share.

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