Activist AREX Capital poised to win one seat in proxy fight at Enhabit, sources say (updated)

Enhabit

25/07/2024 15:28

(Adds details on stock price, proxy fight in paragraphs 3
through 8)
    By Svea Herbst-Bayliss
       July 25 (Reuters) - AREX Capital Management has secured
enough support from Enhabit  EHAB.N  shareholders to win one
seat on the home health and hospice provider's board of
directors, people familiar with the matter said on Thursday.
    Investor votes are still being counted before Enhabit's
annual meeting of shareholders on Thursday morning. AREX
nominated seven candidates to Enhabit's nine-member board.
    The seat is expected to go to Mark Ohlendorf, who has public
company chief financial officer experience.
    The campaign is one of only a handful of proxy fights to go
to a vote this year after Disney  DIS.N  defeated Trian Fund
Management in April. In May Norfolk Southern  NSC.N 
shareholders elected three of activist investor Ancora Holdings'
nominees to the railroad's board.
    Proxy advisory firms Institutional Shareholder Services
(ISS) and Glass Lewis urged shareholders to replace three
current board members with AREX nominees. The two groups'
recommendations often guide investors in voting on hot-button
issues including proposed mergers and who sits on a board, 
        Enhabit's share price has tumbled roughly 60% since it
was spun off of post-acute healthcare services provider
Encompass Health  EHC.N  in July 2022. It has climbed nearly 10%
in the last 5 days and is up 3.5% in early trading on Thursday.
  
        AREX, which owns a 4.9% stake in Enhabit, is the latest
activist investor to push the company for changes and urged
management last year to immediately start a strategic review.
Enhabit in May decided to continue as an independent.
  
        In 2023, the company reached a settlement with Cruiser
Capital and Harbour Point Capital Management and appointed two
new directors to the board.
  
        
  
        
  
    
    

 (Reporting by Svea Herbst-Bayliss)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))