Athenahealth Inc.’s co-founder is stepping down from his role as chief executive officer as the company’s board considers a takeover bid from activist investor Paul Singer.
Singer’s firm, Elliott Management, is urging Athenahealth’s board to approve its estimated $7 billion offer after the firm rejected previous claims that shareholders wanted a deal.
“The board has authorized a thorough evaluation of strategic alternatives, including a potential sale or merger or continuing as an independent company under new leadership,” newly appointed executive chairman Jeff Immelt, the former General Electric CEO, said in a statement.
Athenahealth co-founder Jonathan Bush is vacating both the role of CEO as well as his seat on the Athenahealth board, effective immediately. Immelt and Chief Financial Officer Marc Levine will run day-to-day operations.
“Working for something larger than yourself is the greatest thing a human can do,” Bush said in the statement. “A family, a cause, a company, a country — these things give shape and purpose to an otherwise mechanical and brief human existence. Athenahealth is a near once-in-a-lifetime example of such a thing. With that lens on, it’s easy for me to see that the very things that made me useful to the company and cause in these past 21 years are now exactly the things that are in the way.”
A spokeswoman declined to comment on whether Elliott’s offer spurred the management shakeup. The company said in its statement there is “no assurance that the review being undertaken will result in a merger, sale or other business combination.”
The news had no immediate impact on Athenahealth’s stock.
In a report following the announcement, Piper Jaffray said a number of other companies could pursue an acquisition of Athenahealth, including icrosoft, Oracle and Salesforce. The investment firm said the $160 a share bid from Elliott is low and rose its price target to $179 based on the news of Bush’s departure.
“Financial buyers are also keen on the company’s recurring revenue and strong ability to drive incremental margins. We believe there will be no shortage of bidders,” Piper Jaffray analysts Sean Wieland and Nina Deka wrote.
