Jana Partners takes stake in TeamHealth, to nominate directors

Activist hedge fund Jana Partners LLC disclosed an 8 percent stake in hospital staffing provider TeamHealth Holdings Inc and said it intends to nominate three members to the company's board.

 

Jana Partners, which now holds about 5.89 million shares in TeamHealth, said the company "has made missteps in critical areas including capital allocation, strategy and governance."

 

The hedge fund aims to get board representation so that it can push the company to engage in talks with AmSurg, Don Bilson, head of event-driven research at Gordon Haskett said.

 

TeamHealth rejected a $5.3 billion takeover offer from AmSurg Corp last year and, instead, bought IPC Healthcare Inc for $1.4 billion.

 

Jana Partners said TeamHealth's board would benefit from new directors "with the necessary expertise, experience and focus on shareholder value to help evaluate opportunities for future shareholder value creation". It did not specifically mention a merger. 

 

"Jana is an activist who generally approaches management privately and amicably before escalating its activism. So, this would appear to be aggressive for them," Ken Squire, manager of 13D Activist Investor fund said.

 

The hedge fund says its intended nominees to TeamHealth's board are Edwin Crawford, former chairman of pharmacy benefits manager CVS Caremark Corp, and Nancy Schlichting, the chief executive of health care provider Henry Ford Health Systems.

 

Jana Partners, which said it met with TeamHealth's management on Feb. 24, also intends to nominate Scott Ostfeld, a partner at Jana a co-portfolio manager for its active equity ownership strategy.

 

TeamHealth said its governance committee would review and consider the nominations.

 

The company's shares were trading up 17 percent at $44.60 on the New York Stock Exchange on Thursday.