Hedge fund Camber Capital has purchased 5.7 million shares of Tenet Healthcare, which gives them a 5.7% stake in the Dallas-based health system.
In response to the purchase, Tenet’s stock price increased by nearly 15% on Monday.
The Boston-based hedge fund and its managing member Stephen DuBois has been involved in proxy fights with other companies. Camber purchased a 14.5% stake in Sequenom last year and advocated for operating changes, which ultimately led to the company being sold to LabCorp for $371 million.
Tenet Healthcare, which is the third-largest investor-owned health system in the U.S. with 70 hospitals, has had a rough year financially. Tenet reported a $56 million loss in the second quarter because of declining admissions. Tenet saw a 4.5% decrease in total admissions in the first half of the year.
Then, last week, board members Randy Simpson and Matt Ripperger, who are with Tenet’s largest shareholder Glenview Capital Management, resigned. The resignations resulted from "irreconcilable differences regarding significant matters impacting Tenet and its stakeholders."
In their letter, Simpson and Ripperger, who spent 19 months on the board, wrote they and Glenview believe “the most effective way forward to promote strong patient satisfaction and long-term value creation for Tenet is to step off this board.” They added that Glenview “may evaluate other avenues to be a constructive owner of Tenet. Glenview remains fully committed to its ownership stake in Tenet and its desire to drive improved performance, culture and value.”
In positive news for the company, Tenet’s stock price increased over the past week. After the resignations last week, the stock price increased to $14.46 from $12.92. The stock price increased further to $16.56 by the end of Monday. However, that’s still a far cry from the $52 per share that Tenet saw just two years ago.
It's been an eventful year for Tenet and that looks to continue after Glenview's statements following the resignations and Camber Capital’s purchase. We'll likely hear more about Tenet Healthcare and its board in the coming months.