Activist investment firm Elliott Associates criticized the executives and board of directors at athenahealth for not responding to the firm’s $6.5 billion offer to acquire the company a week after it was sent.
Athenahealth initially said it would review the offer.
“Last week, we made public our interest in acquiring athenahealth at a price of $160 per share in cash,” Jesse Cohn, partner and senior portfolio manager at Elliott Management, wrote in a letter to the athenahealth board of directors. “Additionally, we made clear that we may be able to raise our offer substantially if given access to diligence.”
The takeover attempt began in August 2017 when activist investor Paul Singer’s Elliott Associates acquired 9 percent of athenahealth stock. At the time, Singer noted the company could do better for its shareholders.
“We find this lack of communication concerning because, unfortunately, this is the same pattern of behavior we experienced when we tried to get the company to engage in November,” Cohn wrote. “We have received no direct communication despite our emails and messages to athenahealth offering to discuss next steps or to answer any questions regarding our proposal. None of the Company’s advisors has contacted us.”
Athenahealth is in the midst of remaking itself after cutting costs, closing offices and retooling. In August 2017, it pledged to reduce expenses by $100 million. Last October, it cut 9 percent of its workforce, closed offices and sold the company jet.
In its letter to athenahealth, Elliott Management characterizes athenahealth’s response as cursory and akin to a boilerplate press release.
“For the benefit of shareholders and the company, this pattern of behavior needs to stop,” Cohn wrote. “Our proposal to acquire athenahealth represents an attractive proposition, and numerous shareholders, research analysts and media sources have agreed that athenahealth should engage with us to explore whether a value-maximizing transaction is achievable.”
Cohn noted that Elliott has “a full team ready to engage in confirmatory diligence with the objective of reaching a definitive deal.”
Responding to a Healthcare IT News request for comment, the company said, “Right now, the board is reviewing the offer from Elliot and in due course will make a decision with the best interest of the company in mind.”
This story was updated to include a comment from athenahealth.
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