No. 1 HMA investor wants board replaced

Larry Robbins, the hedge fund manager whose Glenview Capital organization is the largest shareholder of Health Management Associates, has launched a formal push to replace the hospital chain's board of directors. The HMA board last month rolled out a poison pill to prevent Robbins from buying more shares but he says the real issue here is the company's performance not his ownership stake.

Among the eight director candidates Robbins is proposing is one name with a direct local connection: Kirk Gorman, the CFO of a Pennsylvania hospital system, has been a director of Franklin-based Iasis Healthcare since 2004. (For the full Glenview slate, click here and search for "five years.")

So with HMA hunting for a replacement for soon-to-depart CEO Gary Newsome, the boardroom battle is now on in earnest — and it looks like Glenview has kindred spirits in the investment world.

Other hedge funds, including Jana Partners LLC, have acquired stakes in Health Management since Glenview’s holdings were disclosed, according to a person familiar with the trading who asked not to be identified because the holdings are not yet public. Jana, which now owns more than 5 percent, supports Glenview’s proposals, the person said.

Hospital analysts aren't unanimous in how they see events playing out from here. Sheryl Skolnick at CRT Capital says a sale might not bring a price shareholders would like, but Chris Rigg at Susquehanna still sees HMA as being in play — and says Franklin-based Community Health Sytems is the most logical buyer. The market seems to agree: CHS shares (Ticker: CYH) are up 2.6 percent in mid-day trading.