Athenahealth has yet to respond to buyout offer, Elliott says
- Elliott Management has not heard from athenahealth regarding its buyout proposal, a letter sent to athenahealth's board of directors on Monday said. "We find this lack of communication concerning because, unfortunately, this is the same pattern of behavior we experienced when we tried to get the company to engage in November," Elliott Management wrote.
- A week ago, the investment firm sent athenahealth an unsolicited acquisition bid for $160 a share, a deal valued at nearly $6.5 billion.
- Reached for comment, an athenahealth spokesperson referred to a May 7 statement that the company's board of directors is reviewing the proposal and will determine the course of action it believes to be in best interest of the company and its shareholders. "For now, this remains our comment," the spokesperson told Healthcare Dive in an email.
Elliott's bid wasn't a huge surprise, but the investment firm run by Paul Singer looks to be losing its patience regarding athenahealth's performance and lack of communication.
Last month, athenahealth reported a 12% increase in total revenue for the first quarter of this year, but noted bookings had declined to $52.2 million, down from $77.3 million for the same quarter last year.
"We have received no direct communication despite our emails and messages to athenahealth offering to discuss next steps or to answer any questions regarding our proposal," Elliott wrote in its letter. "None of the company’s advisors has contacted us."
A year ago, Elliott said the company was "substantially undervalued." In the past year athenahealth's stock has seen its ups and downs.
Athenahealth, for its part, has attempted to adapt its internal structure and products for new consumers.
Internally, the company cut 9% of its workforce, sold its corporate jet, declined to host a HIMSS after-party, closed its San Francisco office and restructured its management layers. Former GE executive Jeff Immelt joined the company as a board chair.
But bookings are still down, and the company has lost a lot of its senior management, including the recent exit of CPO Kyle Armbrester to act as CEO at Censeo+Advance.
Elliott also said it is "aware that other parties have conveyed directly to the company interest in acquiring athenahealth" but added the company "failed to engage" with those offers as well.
"[F]or the benefit of shareholders and the company, this pattern of behavior needs to stop," Elliott wrote. "Our proposal to acquire athenahealth represents an attractive proposition, and numerous shareholders, research analysts and media sources have agreed that athenahealth should engage with us to explore whether a value-maximizing transaction is achievable."
Elliott has a reputation as an activist investor and its clear the firm isn't backing down from its athenahealth bid. Bush and company also don't seem ready to run from the fight. Bush, alongside former U.S. CTO and current Devoted Health Executive Chairman Todd Park, started the company more than 20 years ago and has been with it for its entire lifespan.
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