Team Health Adds Directors in Settlement with Jana Partners
March 23 2016 - 10:30AM
Dow Jones News
Team Health Holdings Inc. on Wednesday announced an agreement
with activist investor Jana Partners, the latest company to give up
board seats to prevent a proxy fight.
Just weeks after Jana took a stake in Team Health to shake up
the health-care staffing firm's board, the Knoxville, Tenn.-based
company said Scott Ostfeld, partner at Jana, and Edwin Crawford,
former chairman of CVS Caremark Corp., would join its board of
directors effective immediately.
Jana last month revealed that it had bought up about 8% of the
company's outstanding shares and announced its intention to
nominate three directors to its board, criticizing Team Health for
"missteps in critical areas including capital allocation, strategy
and governance."
Jana jumped in following Team Health's decision to rebuff a $5
billion takeover attempt by fellow health-care staffing company
AmSurg Corp. The bid, eventually withdrawn amid Team Health's
resistance, represented a 36% premium to where the stock was
trading at the time. Investors balked at the decision, sending
shares 21% lower through Tuesday's close.
In addition to Mr. Ostfeld and Mr. Crawford, Jana had proposed
Nancy Schlichting, chief executive of the Henry Ford Health System.
As part of the agreement struck Wednesday, Team Health said it
would add Ms. Schlichting as a "class 2" director next year. Team
Health said the deal includes a promise to cut the size of the
board by one director each year over the next three years, bringing
the board down from its current slate of 12.
"We are pleased to have reached this agreement with Jana," said
Team Health Chief Executive Mike Snow, adding that the new
directors "will add valuable perspective to TeamHealth's board as
we execute on our strategic plan."
Jana managing partner Barry Rosenstein praised the company's
"constructive approach" in reaching the agreement.
For Team Health, the agreement is an effort to fend off a proxy
fight. It joins a growing cadre of companies opting to concede
seats and prevent a battle with an activist. Design-software maker
Autodesk Inc., under pressure from Sachem Head Capital Management,
earlier this month agreed to add three directors to its board.
Last month, billionaire investors Carl Icahn and John Paulson
dropped their public fight with American International Group Inc.,
agreeing to stand down for a year in exchange for two board seats.
Mr. Icahn made a similar deal with Cheniere Energy Inc. last year
when the company added two board members he proposed.
Other companies, meanwhile, have resisted granting supervision
to activists, instead naming their own new directors. Yahoo Inc.—in
the midst of a battle with activist investor Starboard Value
LP—this month appointed two board members without any involvement
from Starboard. United Continental Holdings Inc. recently made a
similar move of its own in appointing new directors just ahead of a
proxy fight.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
March 23, 2016 10:15 ET (14:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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