The Advisory Board fends off director takeover, for now
In January, Elliott Management bought 8.3 percent shares in The Advisory Board for $130 million.
The Advisory Board and Elliott Management Corp. have reached an agreement that prevents Paul Singer, head of the hedge fund management firm, from taking over the directorship of The Advisory Board.
The settlement ends, for now, the threat of a takeover for The Advisory Board, which in February announced it was exploring options including the sale of the company.
The standstill agreement is for six months starting March 1 but may be extended twice for up to 30 days, according to a March 1 letter between the two companies. It says Elliott Management may not seek the acquisition or any economic interest in the assets of The Advisory Board.
[Also: The Advisory Board Company weighing option for sale]
The settlement reportedly came out days before a March 9 deadline for shareholders to nominate director candidates.
As part of the deal, Elliott Management agreed not to launch a director-election proxy fight for a period of time, according to The Deal. It left open the possibility of participating in a strategic transaction the Advisory Board might consider, which suggests that Singer is seriously thinking about trying to buy all or parts of the business, the published report said.
In January, Elliott Management bought 8.3 percent shares in The Advisory Board for $130 million.
Elliott is known for seeking out and buying stakes in distressed companies then steering those companies to a sale by a third party. It reportedly forced the sale of American Capital last year after criticizing its performance.
Private equity players have a lot of capacity to make acquisitions in the healthcare IT space, The Washington Post reported. One company that analysts contend could be interested in buying the Advisory Board's healthcare business is Cognizant Technology Solutions of Teaneck, New Jersey, which represents about 80 percent of the company.
[Also: The Advisory Board lays off more than 200, cites pullback after Trump election]
On Feb. 7, The Advisory Board announced it was evaluating its strategic operating options including the potential separation or sale of part or all of the company. A month earlier, the company laid off about 220 employees, or 5.7 percent of its total workforce, and said it would close four offices by the end of 2017.
The company said weak fourth quarter earnings for the consulting and healthcare technology company followed the election of President Donald Trump.
Twitter: @SusanJMorse
