Enhabit Inc. (NYSE: EHAB) has completed its strategic review, which was first announced in August of last year. Ultimately, the company’s board has decided not to pursue a sale or merger at this time, and is instead remaining an independent public company moving forward.

The home health and hospice giant spun off of Encompass Health (NYSE: EHC) in July of 2022. Due to labor pressures and Medicare Advantage (MA) penetration, its performance faltered during its first year on the public market, ultimately resulting in a strategic review. Enhabit’s stock price was $25 per share when it first went public, and it has since fallen to below $10 per share as of Wednesday afternoon.

Enhabit’s board considered a sale, a merger, or other transactions, but unanimously determined that the company should continue on its current path, on its own.

“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,” Leo Higdon, the chairperson of Enhabit’s board, said in a statement. “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 standalone business.”

Based in Dallas, Enhabit has 255 home health locations and 112 hospice locations across 34 states.

The company entered into non-disclosure agreements with a “broad number of counterparties” and received interest from a “variety” of potential investors. But no formal proposals were made, according to the release.

“With the strategic alternatives review process concluded, the management team is focused on operating Enhabit’s core businesses,” Enhabit President and CEO Barb Jacobsmeyer said in a statement. “Our momentum exiting 2023 and through the first quarter of 2024, in which we hired additional frontline clinicians, negotiated more and better home health payer contracts, and controlled G&A expenses, instills excitement in our strategy and team, and we are confident we are taking the right steps to drive future growth to increase shareholder value.”

The strategic review process was initially encouraged by an activist investor, the New York-based hedge fund AREX Capital Management.

In October, it wrote in an open letter that a sale was the “only acceptable outcome” of the strategic review process.

“We strongly emphasize to the board that there should be absolutely no question that the highest bid received in a full and fair auction is Enhabit’s fair value,” AREX Capital wrote at the time. “A sale of the company is the only acceptable outcome for this process.”

This is a developing story. Please check back later for additional updates.