- Tenet Healthcare struck an arrangement this week in which it provides two new board seats to its largest shareholder, Glenview Capital Management, in exchange for their agreement not to challenge the company's board or management at the next annual meeting, Modern Healthcare reports.
- With the two additions, Randy Simpson and Matt Ripperger, Tenet's board of directors will now have 12 members.
- The arrangement also includes an option for Glenview to propose two additional board directors, who would be independent of both Tenet and Glenview and subject to board approval, effective January 31, 2017, the company reports.
Compared to the day's open, Tenet closed up 5.2% on Wednesday. The board appointments lessen concerns that Glenview might sell its 18% equity stake in the system.
“That relieves a huge amount of pressure, in our view, and makes strides in de-risking the stock,” Bloomberg quoted a note by Mizuho Securities USA analyst Sheryl Skolnick, who raised her Tenet rating to buy from neutral.
The surge comes amid a rough patch for Tenet, which has seen its stock down 59% over the past six months and recently filed a notice stating it's in settlement talks regarding allegations several of the system's hospitals paid kickbacks for referrals of pregnant women to bring in Medicare dollars, as Modern Healthcare reports.