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Message from healthcare company Resurgence Health Group LLC to SunLink Health Systems Inc.: The diagnosis is not good, and it's time to sell.
SunLink Health Systems, the Atlanta-based operator of seven community hospitals in Alabama, Georgia and Mississippi, is being pressured by Resurgence Health Group and other shareholders to respond to a takeover offer the group had made in November. According to a Securities and Exchange Commission filing on Monday, a shareholder group including activist investor Berggruen Holdings North America and Resurgence Health Group, want SunLink to respond to its $7.50 a share bid to take over the company. Resurgence and its group of investors, which own 9.4% of the hospital operator, had originally made the offer to buy SunLink in November. The group on Jan. 11 sent a letter to Howard Turner, special counsel to the special committee of SunLink's board, seeking a response. The group said it was disappointed that SunLink did not respond to their offer by Dec. 7. Subsequently they sent another letter, according to the filing. "Our client is frustrated with the Board's inaction with respect to the Offer and believes that such inaction evidences management's desire to remain entrenched at the expense of SunLink's shareholders," Resurgence Health wrote in the letter. Last year, according to the filing, Berggruen Holding teamed up with Resurgence and agreed to provide the financing to enable Resurgence to make the bid. The bidders also complained about SunLink's board, noting "close personal relationships" between management and certain directors and questioning whether they are looking out for shareholder interests. "We urge you to act not in your own self-interests or in a manner beholden to management, but instead, in the best interests of all of your shareholders by contacting us promptly and meeting with us as soon as possible," the letter said. SunLink has a $46 million stock market capitalization. - Ron OrolRon Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. CategoriesComments
From: DeniseM,
Yes, I find it interesting as well since Resurgence owes us money for equipment they purchased from us and we have been unable to get paid for the past 5 months. Their accounts payable person sang me a sob story about how they are on hard times because medicare owes them millions of dollars. They sound like scam artists and their website looks like it was made by someone's kid in 6th grade. A real class act.
Posted on:
November 22, 2008 12:28 AM
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Interesting Resurgence is about to buy another hospital group when it just left Tattnall County's hospital with several million in debt and walked out on a contract for EMS services with the county.