By Svea Herbst-Bayliss
(Reuters) – Hedge fund AREX Capital Administration is looking for seven board seats at Enhabit, arguing that new administrators are wanted to assist reverse poor monetary efficiency on the U.S. residence well being and hospice supplier, individuals accustomed to the matter stated on Thursday.
AREX, which has been pushing Enhabit to place itself up on the market, privately nominated the seven candidates in March throughout the firm’s nominating window, the sources stated. The AREX nominees have healthcare and capital markets expertise and embrace an AREX companion, James Corcoran, the sources stated.
Enhabit this week stated it determined to proceed as an unbiased, public firm after having evaluated a variety of strategic choices. An organization consultant was not instantly accessible for touch upon the AREX board problem.
AREX has argued that the board lacks residence hospice experience, which it says its candidates can present. AREX stored its nominations personal till now as a result of it didn’t wish to disrupt the strategic evaluate course of, the sources stated.
The Enhabit board presently has 13 members however shall be decreased to 9 on the firm’s annual assembly later this 12 months.
Enhabit was spun off from post-acute healthcare providers supplier Embody Well being (NYSE:) in July 2022, and since then its shares have misplaced greater than half of their worth. Shares closed buying and selling at $9.70 on Wednesday.
AREX had informed the corporate final 12 months that it needed it to commit instantly to begin a evaluate earlier than the top of 2023 and shut any potential transaction after the two-year anniversary of the spinoff to keep away from tax issues.
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Enhabit agreed with traders Cruiser Capital and Harbour Level Capital Administration in March 2023 to refresh its board by including two new administrators who’ve expertise in healthcare consulting and knowledge know-how.
