The private equity firm once again reached out to the health technology servicer, urging them to listen to shareholders and sell the company.
Elliott Management Corp. issued its third letter in as many weeks to Athenahealth Inc., as it pursues a cash offer to acquire the company for $160 per share, a deal totalling $7 billion.
The organizations issued dueling press releases Thursday, with Elliott urging Athenahealth to listen to shareholders calling for the company's leadership to agree to a sale. Athenahealth responded by saying it takes "very seriously its obligation to protect shareholders," while it considers its next steps.
In Elliott's letter, the organization said taking Athenahealth private represented the best chance to grow the company and its market share.
"Regardless of the source, the feedback has been overwhelmingly supportive of the idea that athenahealth has struggled as a public company and should immediately and fully explore a value-maximizing sale," the letter read.
Athenahealth responded in a brief letter, saying it was discussing the offer among its executive team with its shareholders' interests in mind.
"The board currently is undertaking a thorough and deliberate analysis of Elliott Management’s proposal to acquire the company for $160 per share in cash and will continue to take the time necessary to complete this review notwithstanding Elliott Management’s attempts to publicly pressure the Board and management team," the organization said in a statement. "The board will communicate the results of this analysis and its recommendation promptly."
Below are quotes from each press release:
Athenahealth: "Our record is clear: members of the athenahealth Board and management team have had an ongoing dialog with the Company's major shareholders, as well as Elliott Management, regarding the Company's business and the Elliott proposal."
Athenahealth: "Based on our discussions with shareholders, we do not believe the positions set forth in Elliott Management's letter are representative of the positions of all of our shareholders."
Athenahealth: "In addition, notwithstanding the assertions in Elliott Management's letter, the Company fully engaged with respect to Elliott's prior private proposal and, after careful analysis, the Board determined that the proposal was not in the best interests of the Company's shareholders."
Elliott: "Elliott believes it has reviewed all of the research that has been published regarding our offer for the Company. From this review, it is apparent that equity research analysts overwhelmingly find that our offer represents an attractive starting proposition for shareholders and that athenahealth should fully consider it as well as other possible offers."
Elliott: "Last Friday, Janus Henderson, the Company’s largest shareholder and an investor since athenahealth’s IPO more than a decade ago, also came public in a 13D filing expressing its support for a comprehensive sale process and its concern with the Company’s execution of “strategic initiatives."
Elliott: "Based upon the feedback to date, we think the best next step would be for [Athenahealth] to authorize its advisors to immediately initiate a sale process, in which Elliott will participate as a bidder. We would welcome the opportunity to engage in further discussions about our offer with Jonathan, Jeff and the rest of the Board. We are prepared to meet anytime, and we will make ourselves available at your convenience."
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.