Printer Friendly

COMMONWEALTH ASSOCIATES CONSENT CAMPAIGN FAILS TO REPLACE PROVIDENCE HEALTH CARE BOARD

 BEREA, Ohio, Oct. 27 /PRNewswire/ -- Providence Health Care, Inc. (NASDAQ: PHCI) announced today that the consent solicitation launched by Commonwealth Associates two months ago has failed to deliver sufficient unrevoked consents to replace the Providence Board.
 Lawrence B. Cummings, Chairman and Chief Executive Officer of Providence, stated, "Now that our advisors have had a brief opportunity to review the consents Commonwealth delivered on Monday, it is clear -- even from this cursory review -- that Commonwealth did not receive consents from the required majority of outstanding shares, despite Commonwealth's public claims to the contrary. The review showed that Commonwealth was a little more than 2 percent short of the required percentage.
 "I hope that Commonwealth will graciously concede its defeat and bring the disruption and unnecessary expense it has brought upon the Company and its shareholders to a close. I look forward to a more constructive approach from Commonwealth in the future if they continue to have problems with our Board and management."
 Thomas Janes, a Providence director and Chairman of the Compensation Committee, commented, "We have seriously considered the concerns raised by shareholders about the compensation of Providence's two most senior executives. In the past, we were unable to negotiate with Commonwealth what we believed to be a fair compensation mix of salary, bonus and stock options, based on industry standards. We are well along, however, with the creation of a new compensation plan, designed with the assistance of a leading national compensation consulting firm. A primary goal of this new plan is to better align senior executive compensation with the interests of Providence's shareholders."
 The Company also announced that Commonwealth filed a lawsuit in Delaware on Monday, October 25, claiming it had received sufficient consents to replace the Providence Board and, therefore, its nominees had been elected as the new Providence Board of Directors. Because Commonwealth failed to deliver the required number of consents, the Company believes the suit is without merit and is seeking to have the suit withdrawn or promptly resolved. Until the lawsuit is resolved, the Company plans to continue its normal course of business under the current Board and management.
 Providence Health Care, Inc., was formed in February 1989 and acquired Northwestern Service Corporation, a nursing home operator, in June 1989. The Company operates 15 long-term care facilities, 13 in Ohio and one each in Vermont and Virginia, with an aggregate 1,245 beds. Of these, 1,184 are nursing care beds and 61 are assisted-living beds. In addition, the Company manages a 175 bed facility in Cleveland, Ohio. Through Northwestern, which was merged into Providence in December 1992, the Company has been engaged in the nursing home business since 1970 and since 1983 has grown significantly through selected acquisitions and internal development. All of the Company's Ohio facilities are located within approximately 150 miles of the Company's headquarters in Berea, Ohio, a Cleveland suburb.
 NOTE TO EDITORS: A contested consent solicitation requires an insurgent group to acquire written consents from shareholders representing a majority of a company's outstanding shares anytime within a 60 day period. Management may solicit revocations to those consents during the consent period. (In this particular case, Commonwealth first turned in its consents to the company on Monday, Oct. 25, the final day of its 60 day allotment, which began on August 26, 1993.
 A consent campaign is very different from a proxy contest where shareholders vote on a specific meeting date for either management or the insurgents. If a quorum is present at the meeting, the group with the greater number of votes wins, even if neither acquires a majority of the outstanding shares.
 -0- 10/27/93
 /CONTACT: Stanley J. Kay of MacKenzie Partners, Inc., 212-929-5940/
 (PHCI)


CO: Providence Health Care, Inc.; Commonwealth Associates ST: Ohio IN: HEA SU:

MP-LD -- NY112 -- 7735 10/28/93 09:09 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 28, 1993
Words:638
Previous Article:AMERISCRIBE ANNOUNCES SHARE PRICE CONSIDERATION FOR PROPOSED MERGER WITH PITNEY BOWES MANAGEMENT SERVICES
Next Article:TRIARC COMPANIES CLEARED TO APPLY TO LIST ON NYSE; SWITCH TO CALENDAR YEAR
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters