AREX Capital Expresses Disappointment in Enhabit’s Strategic Review Conclusion

Home Health

NEW YORK—AREX Capital Management, LP (“AREX Capital Management” or “we”), together with its affiliates, the owners of approximately 4.8% of the shares of Enhabit, Inc. (Enhabit), issued the below statement expressing its disappointment in the conclusion of Enhabit’s strategic review.

“We are disappointed that Enhabit’s strategic review process has concluded without a sale of the Company. We do not believe that this failure reflects Enhabit’s intrinsic value or strategic potential. Rather, this failure lies with Enhabit’s Board. In March, we nominated a slate of seven highly qualified candidates to stand for election at the 2024 Annual Meeting. We chose not to publicly disclose our nomination to avoid disrupting the strategic review process to the detriment of shareholders, but clearly our hope that this Board might finally deliver a positive result for its shareholders was wishful thinking.

We believe that Enhabit’s lackluster operating performance relative to peers over the past two years plainly demonstrates that the Board urgently needs the deep operational expertise in home health and hospice that the AREX Slate would bring. The AREX Slate is eager to begin the work of driving improvement at Enhabit and maximizing value for all shareholders.”

This statement follows an announcement from the Enhabit Board of Directors which concluded that Enhabit would continue to operate as an independent, public company. This was decided after a strategic review process which evaluated a full range of strategic alternatives, including a potential sale, merger or other transaction.

“We believe macro headwinds including, among other things, uncertain regulatory developments including Medicare reimbursement policies throughout the health care industry and an evolving antitrust landscape, a difficult health care operating environment, and persistently high interest rates ultimately stifled possibilities for a transaction that would enhance shareholder value,” said Chairperson of the Board Leo Higdon. “Considering this, and other strategic alternatives reviewed with advisors during the review process, the Board determined the best way to enhance shareholder value at this time is to continue to operate as a stand-alone business.”

Below are the seven candidates AREX has nominated for Enhabit’s Board election:

  • Megan Ambers
    • Chief People Officer of Ivy Rehab Network, Inc.
    • Previously served as the Senior Vice President of Workforce Strategy, HR Innovation & Total Rewards at Amedisys, Inc. 
    • Interim Chief Human Resources Officer of Amedisys from March 2022 to October 2022.
  • James T. Corcoran
    • Partner at AREX Capital Management.
    • Previously a member of the board directors of Tuesday Morning Corporation (NASDAQ: TUES), an off-price retailer, from 2017 to 2020, where he served on the Audit and Nominating and Governance Committees.
  • Maxine Hochhauser
    • Chief Executive Officer of HealthPRO Heritage
    • Previously served as President of the Home and Community Based Services Division of LHC Group, Inc.
    • Previously served as Chief Operating Officer of Addus HomeCare Corporation from 2014 to 2017.
    • Previously served as Senior Vice President of Enterprise Operations of Amedisys from 2012 to 2014, and AllianceCare, Inc. from 2008 to 2012.
  • Mark W. Ohlendorf
    • Most recently served as the Managing Member of Four Peaks Advisors, LLC
    • Previously served as President for Brookdale Senior Living, Inc. from 1997 to 2016, including service as Brookdale’s Chief Financial Officer from 2006 to 2015.
    • Previously served as Vice President and CFO for VITAS Healthcare Corporation from 1990 to 1997.
  • Anna-Gene O’Neal
    • Senior Vice President of Home Health, Hospice, and Palliative Care at HarmonyCares
    • Previously served as the President of Brookdale’s Health Care Services division from 2019 to 2021. She subsequently served as President, Hospice Service Line for HCA Healthcare, Inc. from 2021 to 2022, following HCA’s acquisition of a majority stake in the business.
    • Previously served as President and CEO of Alive Hospice from 2012 to 2019.
  • Gregory S. Sheff
    • Previously served as Interim President, Home Solutions at Humana, Inc. from 2021 to 2022, as well as Chief Medical Officer, Home Solutions, from 2020 to 2022.
    • Previously served as Executive Vice President and Chief Medical Officer of AccentCare from 2015 to 2019.
  • Juan Vallarino
    • President and Chief Executive Officer of MyLaurel Health
    • Previously served as Chief Executive Officer of myNEXUS from 2019 until its successful sale in 2021 to Anthem Inc. (now known as Elevance Health, Inc.). He also served myNEXUS as a Vice Chairman and in a strategic advisor role from 2018 to 2019.
    • Previously spent over two decades with HCA and its predecessor companies from 1993 to 2016. Most recently he served as Senior Vice President of Employer and Payer Engagement with responsibility for over $30 billion in net revenue.

OUR DIGITAL PARTNERS