By Svea Herbst-Bayliss
(Reuters) – AREX Capital Management has secured enough support from Enhabit shareholders to win one seat on the home health and hospice provider’s board of directors, people familiar with the matter said on Thursday.
Investor votes are still being counted before Enhabit’s annual meeting of shareholders on Thursday morning. AREX nominated seven candidates to Enhabit’s nine-member board.
The seat is expected to go to Mark Ohlendorf, who has public company chief financial officer experience.
The campaign is one of only a handful of proxy fights to go to a vote this year after Disney defeated Trian Fund Management in April. In May Norfolk Southern shareholders elected three of activist investor Ancora Holdings’ nominees to the railroad’s board.
Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis urged shareholders to replace three current board members with AREX nominees. The two groups’ recommendations often guide investors in voting on hot-button issues including proposed mergers and who sits on a board,
Enhabit’s share price has tumbled roughly 60% since it was spun off of post-acute healthcare services provider Encompass Health in July 2022. It has climbed nearly 10% in the last 5 days and is up 3.5% in early trading on Thursday.
AREX, which owns a 4.9% stake in Enhabit, is the latest activist investor to push the company for changes and urged management last year to immediately start a strategic review. Enhabit in May decided to continue as an independent.
In 2023, the company reached a settlement with Cruiser Capital and Harbour Point Capital Management and appointed two new directors to the board.
(Reporting by Svea Herbst-Bayliss)
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