Health Management Board Hires Advisers to Review Takeover

Health Management Associates Inc.’s new board of directors hired financial advisers to evaluate the $3.9 billion takeover bid made by Community Health Systems, the second-largest U.S. hospital chain.

The evaluation is consistent with terms of the acquisition agreement announced July 30, Health Management said in a statement today. The cash and stock deal is expected to close by the end of the first quarter next year, the Naples, Florida-based company said in its statement.

Health Management runs 71 hospitals in 15 states, mainly in non-urban areas. Glenview Capital Management LLC, which owns about 15 percent of the stock, ousted the board and put in its own nominees to determine if the offer is too low. The review should be reassuring to shareholders, said Brian Tanquilut, an analyst at Jefferies & Co. in Nashville, Tennessee.

“It’s part of a process and they’re really covering their bases,” Tanquilut said in a telephone interview. “From an investor perspective, having a time line actually helps in evaluating the risk of where the stock will trade.”

Health Management’s board retained advisers Lazard Freres & Co. LLC and UBS Securities LLC and legal counsel Paul, Weiss, Rifkind, Wharton & Garrison LLP and financial operating and compliance consultant Alvarez & Marsal Healthcare Industry Group LLC, according to the statement.

“Both organizations are working diligently towards completing the transaction, which we expect to close in the first quarter of 2014,” Tomi Galin, a spokesman for Community Health, said in an e-mail.

Health Management fell 1 percent to $12.68 at 4 p.m. in New York trading. Community Health declined less than 1 percent to $39.18.

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