Athenahealth shares jumped on Wednesday after the healthcare technology company announced it was evaluating strategic options including a sale and that CEO and co-founder Jonathan Bush had resigned.
Bush’s departure comes amid pressure from hedge fund Elliott Management, which last month made a hostile takeover offer for Athenahealth. He is also facing allegations of inappropriate workplace conduct.
Athenahealth said it had begun a search process for a new chief executive, with CFO Marc Levine for now assuming “greater day-to-day operational responsibilities and oversight.”
The board “has initiated a process to explore strategic alternatives,” the company said in a news release. “As part of this process, the board will consider a sale, merger or other transaction involving the company as well as continuing as an independent company.”
Investors apparently cheered the news as Athenahealth shares climbed 4.2% to $157.44 in trading Wednesday. Elliott has offered $160 per share for the firm, valuing it at $6.5 billion.
Stephen Spruiell, an Elliott spokesman, said the fund was looking forward to “participating as a bidder in the company’s strategic exploration process.”
Bush, a nephew of former president George H.W. Bush, co-founded Athenahealth in 1997. The company now provides provides billing and other digital services for 114,000 medical providers and stores more than 110 million patient records.
But as CNBC reports, Bush “came under scrutiny after reports surfaced nearly two weeks ago that he attacked his ex-wife during a custody battle more than a decade ago. In recent days, examples of potentially inappropriate office behavior emerged.”
“It’s easy for me to see that the very things that made me useful to the company and cause in these past twenty-one years, are now exactly the things that are in the way,” Bush said Wednesday in a statement.
Since disclosing in May 2017 that it had acquired a 9.2% stake in Athenahealth, Elliott has pressured the company to cut costs and name an independent chairman. Former General Electric CEO Jeff Immelt was appointed chairman in February.
Other shareholders, including Janus Henderson and ClearBridge, have pushed Athenahealth to consider purchase offers.