Arex Capital Issues Letter to Board of Directors of Enhabit, Inc.
05 Octobre 2023 - 4:00PM
AREX Capital Management, LP, together with its affiliates, the
owners of approximately 4.7% of the shares of Enhabit, Inc. (NYSE:
EHAB) (the “Company”), today issued an open letter to the Company’s
Board of Directors (the “Board”).
The full text of the letter is set forth
below:
October 5, 2023
Via Electronic Mail
The Board of DirectorsEnhabit, Inc.6688 N. Central
ExpresswaySuite 1300Dallas, TX 75206
Attention: Barbara A. Jacobsmeyer, Chief Executive Officer
Dear Barbara and Members of the Board:
AREX Capital Management, LP and its affiliates
(together, “AREX” or “we”), are collectively the beneficial owners
of approximately 2.4 million shares of Enhabit, Inc. (“Enhabit” or
the “Company”), representing approximately 4.7% of the Company’s
common shares outstanding.
Poor communications have again caused
unnecessary and substantial harm to Enhabit’s shareholders.
Somehow, the Company took the simple act of proactively attempting
to streamline their strategic alternatives review process and
created confusion for investors—with the Company’s initial 8-K on
Monday failing to even mention the process! Last night’s
clarification was better but shouldn’t have been necessary.
Monday’s disclosure also needlessly implied that
Enhabit’s lenders had slashed their Revolving Credit Facility
commitments, an error that was repeated by several sell-side
analysts. This inference is simply wrong. There was, in fact, no
change at all to lenders’ permanent commitments or to the overall
facility size, and there was virtually no change to the Company’s
effective revolver limit, which stood at $239 million on June 30th
and now stands at $230 million. Likewise, the fact that the waiver
was granted for a five-basis-point consent fee with no change to
the facility’s interest rate grid highlights what a non-event this
was for the Company’s lenders and showcases their strong support
for the Company’s strategic alternatives review. We are perplexed
as to why all of this wasn’t explained with straightforward
language.
As we stated in yesterday’s conversation with
you and Chairman Lee Higdon, this latest debacle has once again
proven the already blindingly obvious point that Enhabit must not
remain a standalone public company. The value of the Company’s
highly strategic assets has been obscured by underwhelming
execution and bloated overhead. Thankfully, Enhabit’s strategic
alternatives review process should ultimately result in a sale. We
strongly emphasize to the Board that there should be absolutely no
question that the highest bid received in a full and fair auction
is Enhabit’s fair value. A sale of the Company is the only
acceptable outcome for this process.
We can only hope that the Board is as exhausted
by these persistent disappointments as its shareholders. But let us
be perfectly clear: we will act decisively to protect our rights if
the Company has not announced a sale by early next year.
Best regards,
|
|
Andrew RechtschaffenManaging
Partner |
James T. CorcoranPartner |
About AREX
AREX Capital Management, LP is a value-oriented
investment firm based in New York City. AREX takes a long-term,
opportunistic approach to investing and focuses primarily on
publicly traded companies with significant, unrealized
potential.
Media Contact
Valerie Toomey, Chief Operating OfficerAREX Capital Management,
LP(646) 679-4000info@arexcapital.com
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/5dea6925-8688-407e-8570-ef1bf4e5953c
https://www.globenewswire.com/NewsRoom/AttachmentNg/a6e4c362-2f4b-4495-a7fb-d7607ca11c52
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