EHAB - Enhabit gains amid investor push for sales process

2023-06-13 11:05:27 ET

Enhabit ( NYSE: EHAB ) rose 4% amid a push from an investor for the home-health care provider to pursue a sales process.

AREX Capital Management, which has a 4.5% stake in Enhabit ( EHAB ), said the company should immediately commit to starting a strategic review before the end of the year, according to a statement on Tuesday.

"We believe Enhabit’s Board should immediately commit to shareholders that it will commence a review of strategic alternatives before the end of 2023, with an eye towards a potential transaction closing shortly after the two-year anniversary of the spin-off to avoid any tax complications," AREX's Andrew Rechtschaffen and James Corcoran wrote in a letter Tuesday to the Enhabit board.

AREX argues that based on recent sales multiples, Enhabit ( EHAB ) may be worth $30–$40 a share in a sale, more than triple its current share price at the high end of the range.

AREX also highlighted that once the sale of Amedisys ( AMED ) is completed, either to Option Care ( OPCH ) or UnitedHealth's ( UNH ) Optum, Enhabit ( EHAB ) will be the last publicly traded company focused primarily on home health.

"Our  our diligence suggests that there are many market participants who would logically have interest in acquiring Enhabit," according to the letter.

More on Enhabit

• Enhabit: Difficult To Justify At 20x Earnings, Reiterate Hold
• Enhabit: Difficult Time Ahead According To Market Generated Data (Technical Analysis)

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