IHHI’s majority shareholder shows interest in board takeover
By MEREDITH BONNER
HHBR Assistant Managing Editor
In Home Health’s (Minnetonka, MN) largest shareholder, a subsidiary of Manor Care (Toledo, OH), has demanded IHHI to call a special meeting of its shareholders to consider three proposals by Manor Care.
The major shareholder is proposing IHHI remove all members of its board, other than Michael Ford and Eugene Terry, and to fix the number of members at six people. Manor Care is also proposing to elect to IHHI’s board four officers and employees of Manor Care or its subsidiaries.
Manor Care’s proposal to remove directors other than Ford and Terry would, if adopted, affect directors James Lynn, Stephen Jessup, and Judith Storfjell.
Manor Care owns 2.3 million shares of IHHI’s common stock, constituting 41% of the outstanding shares of common stock. Manor Care also owns 200,000 shares of IHHI’s series A preferred stock, which is convertible at $6 per share into 3.3 million shares of IHHI common stock.
IHHI said Ford and Terry, along with Lynn, Storfjell, and Wolfgang von Maack, were elected to IHHI’s board at its most recent annual meeting on Feb. 23. On May 4, Jessup was appointed as an additional member. Von Maack, IHHI’s former chief executive officer, resigned from the board May 31, the company said. Manor Care is proposing that Keith Weikel, Geoffrey Meyers, Rodney Hildebrant, and Steven Cavanaugh, all officers of Manor Care or one of its subsidiaries, be elected to IHHI’s board in their place.
IHHI’s board began considering investment bankers in response to a May 22 letter from Manor Care in which it stated that its "preliminary analysis indicates that we should be able to offer shareholders a meaningful premium to the current trading price of IHHI shares and provide them with an alternative to holding those shares." To date, no specific proposal has been received by IHHI from Manor Care, the company said.
IHHI has requested advice from the investment banking firm Houlihan, Lokey Howard & Zukin, which was hired to assist the board in evaluating and responding to Manor Care’s interest in the company and in exploring possible strategic alternatives to maximize shareholder value.
In addition, the board appointed Ford to act as IHHI’s interim chairman and CEO, and Storfjell to act as interim president and COO.
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