Proxy advisor Glass Lewis advises Enhabit investors to elect three AREX nominees

Enhabit

18/07/2024 13:46

By Svea Herbst-Bayliss
       July 18 (Reuters) - Proxy advisory firm Glass Lewis said
on Thursday Enhabit  EHAB.N  shareholders should elect three
AREX Capital Management director candidates to the nine-member
board.
    It advised choosing AREX nominees Maxine Hochhauser, Mark
Ohlendorf and Gregory Sheff, according to its report seen by
Reuters.
    "There is a valid case to be made for supporting at least
incremental change to the company's board, given the company's
financial underperformance relative to its closest peers, the
company's missteps in the strategic review process and the
relevant experience and expertise of the dissident nominees,"
the report said.
    The recommendation comes days after Glass Lewis' bigger
rival Institutional Shareholder Services (ISS) said shareholders
should elect three AREX director candidates.
    Together ISS and Glass Lewis often influence how investors
vote on proposed mergers and who serves on a company's board.
    Shareholders will vote on July 25 unless the two sides reach
an agreement beforehand.
    AREX has been asking investors to replace seven directors to
help reverse poor financial performance at the two-year-old
company.
    It has also been pushing the home health and hospice
provider to put itself up for sale as its stock price has
dropped 61% since it became a standalone company. In the last
five days, the stock price has climbed nearly 10%. 
    The company, which is urging shareholders to elect all nine
of its directors, decided earlier this year to remain an
independent company.
    It earlier this week said second-quarter profit could be in
the range of $24.5 to $25.0 million when it reports results next
month. 
    It reported adjusted earnings before interest, taxes,
depreciation and amortization of $25.3 million in the first
quarter. 
    AREX, which owns a 4.9% stake in Enhabit, is backing CEO
Barbara Jacobsmeyer and director Barry Schochet for re-election.
    Schochet joined the board last year when the company reached
an agreement with investors Cruiser Capital and Harbour Point
Capital Management in March 2023.
    

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