Some interesting news came across the wire Monday afternoon, as Encompass Health Corporation (NYSE: EHC) provided an update on the separation of its home health and hospice business.
Encompass Health had said in the past that it planned to spin off the segment into its own publicly traded company: Enhabit Home Health & Hospice. While that still seems to be the plan, it appears it’s a more tentative one than previously thought.
“The company continues to expect to complete the separation of Enhabit in the first half of 2022 via a spinoff,” the company said in its update Monday. “However, as Encompass Health proceeds with the separation process, our board and management will assess any value-creating strategic opportunities and remain open to value-maximizing alternatives, including a sale or merger of Enhabit.”
It’s still likely that the original plan will come to fruition: that Encompass Health’s home health and hospice segment will spin off and become its own publicly traded company.
Having said that, it seems the company is leaving the door open for an alternate route, so long as any potential buyer is willing to pay the right price for the entity. Whether or not there is a buyer out there willing to do so remains to be seen.
Throughout the process, Encompass Health’s board has received feedback from its shareholders and considered it a part of the decision-making process.
Jana Partners, which owes more than 2% of Encompass Health, reportedly was urging the company to “re-engage with interested third parties on a potential merger” as recently as late December.
An activist investment firm, Jana Partners was also working with the health care veteran Edwin “Mac” Crawford – a former executive of Caremark – to push for the alternative direction.
Either way, the final answer will come soon, as Encompass Health announced on its fourth quarter earnings call recently that it was beginning to rebrand its home health and hospice locations underneath the Enhabit name.
As of early February, its home health and hospice CEO Barb Jacobsmeyer told Home Health Care News that one of her top priorities was already the rebrand.
“The effort that we’re going to need to put in with the rebranding [is a top priority], so that we can make sure that we don’t miss a step when it comes having our new identity out there,” she said.
Meanwhile, Encompass Health also provided an update on its board refreshment process.
“The company confirms that, in connection with its previously announced board refreshment process, the size of the board will consist of no more than 12 directors as of the conclusion of the 2022 Annual Meeting of Stockholders,” the update read.