BOSTON : Activist investment firm Jana Partners wants Encompass Health to re-engage with interested third parties on a potential merger for its home health and hospice business before moving forward with a planned spin-off of the unit, sources familiar with the matter said on Tuesday.
The investment firm wrote to Encompass in November, urging management to pursue a possible merger or spin-off with a strategic partner instead of going it alone by separating its home health and hospice business into an independent public company through a carve-out IPO, spin-off, or split-off. The sources said that Jana believes there is interest from private firms in combining with the home health and hospice business. Jana has recently been contacting Encompass shareholders to discuss their views, the sources said.
Jana first bought shares in Encompass in 2020 and has held discussions with management and the board away from the public eye since then. The firm has pushed Encompass to pursue a separation of the home health and hospice business, but more recently has argued for combining with another industry player to gain greater scale in a more challenging environment, the sources said.