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originally made the offer to buy SunLink in November.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 Orol
Ron 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.
Comments
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.