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Morning Brief: Tenet Shares Surge on Shake-Up

Glenview Capital Management owned nearly 18 percent of Tenet’s shares in June.

Shares of activist target Tenet Healthcare jumped after the hospital management company announced a shake-up of key executives. Chairman and Chief Executive Officer Trevor Fetter will leave by March 15, 2018, Tenet said, and independent lead director Ronald Rittenmeyer is now executive chair. The company is conducting a search for a new CEO, according to its August 31 statement.

Tenet also announced the implementation of a short-term poison pill designed to protect the value of its net operating loss carryforwards, or NOLs. The company had about $1.7 billion in these potentially valuable tax benefits as of December 2016, which works out to about $600 million in tax savings. Tenet says that under the tax code, a change in control could severely limit its ability to use the NOLs. It explains an “ownership change” would occur if there’s a 50-percentage point change in stock ownership over a three-year period by shareholders owning more than 5 percent of the company.

As of June, Larry Robbins’ Glenview Capital Management owned nearly 18 percent of Tenet’s shares, which rose 5.6 percent on September 1 to close at $18.12. About two weeks ago, two Glenview representatives resigned from Tenet’s board, citing “irreconcilable differences.” A standstill agreement between the hedge fund and the company expired on Friday. Stay tuned for this one.

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Start-up Juicero, which sells cold-pressed juicing systems, said it is suspending the sale of its Juicero Press and Produce Packs immediately and is looking for an acquirer. “It became clear that creating an effective manufacturing and distribution system for a nationwide customer base requires infrastructure that we cannot achieve on our own as a standalone business,” Juicero said in an announcement September 1. The company said it will offer refunds over the next 90 days. Among its investors is Two Sigma Ventures, which participated in Juicero’s Series B financing.

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Shares of Buffalo Wild Wings fell 1.3 percent to $101.40 on September 1. Earlier this year activist hedge fund Marcato Capital Management secured three seats on the company’s board. However, the stock is now trading nearly 30 percent below what Marcato paid in June 2016. The share saw no bounce from BWW televising the Mayweather-McGregor boxing match in its restaurants a week or so ago.

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