Health Management Backs Community Health Takeover

Health Management Associates Inc said on Wednesday its board backed its proposed takeover by Community Health Systems Inc after a review period spurred by activist investor Glenview Capital.

Health Management said that the board had agreed to the transaction at the price of $10.50 in cash plus 0.06942 share of Community Health common stock, or about $13.44, per Health Management share, plus a contingent value right of up to $1.00 per share.

Those were the terms of the deal when it was announced back in August by a previous board of directors, although a decline in Community Health's share price now puts the deal value at $3.6 billion plus the contingent value right compared with $3.9 billion it was when first announced.

Health Management shares have also traded off since the deal and closed on Tuesday at $12.52.

Glenview Capital, which owns 14.5 percent of Health Management's stock and is its largest shareholder, said that UBS Securities and Lazard Freres & Co had conducted a fairness opinion on the deal for the board.

Shareholders replaced Health Management's board in August with a slate of directors that Glenview had put forth, raising questions about whether the deal would go through or whether the terms would change.