ATHENAHEALTH RESIGNATION SUBMITTED
The founder and longtime chief executive of Watertownbased healthcare software giant athenahealth, Jonathan Bush, has resigned amid multiple allegations into his personal conduct and a lengthy fight with an activist investor as the company says it is considering a sale.
“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,” Bush said in a statement. “I cannot imagine a single organization more loaded with potential to transform healthcare.”
Bush’s departure comes after weeks of media reports about his personal conduct, including an allegation of sexual harassment in the New York Post and physical abuse of his then-wife published by the Daily Mail.
Athenahealth has also been battling with Elliott Management Corp., a hedge fund that has been pushing for significant change at the company designed to make it more valuable. Elliot had already submitted an unsolicited offer for athenahealth, offering $160 per share, a total of about $6.5 billion. In a statement, the investment company applauded the decision to consider a sale.
“Elliott welcomes the board’s decision to explore strategic alternatives and believes it is the right one for athenahealth’s shareholders, employees and customers,” the investment company said. “We have long believed that athenahealth is a great company, and we look forward to participating as a bidder in the company’s strategic exploration process.”
Last summer, athenahealth said it would cut $100 million in costs and replace Bush as chairman of the board in an effort to appease Elliott.
While the company explores its options and looks for a new CEO, Jeff Immelt, the former CEO of GE, has been appointed as executive chairman. Immelt was appointed as chairman of the board earlier this year.
“To ensure athenahealth maximizes shareholder value and is best positioned to realize the full potential of its premier healthcare technology platform, 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,” Immelt said in a statement. “We approach this process with an open mind and a commitment to continuing to strengthen the company.”
Sean Wieland, an analyst with Piper Jaffray, said athenahealth is still in a strong position, and expects any sale to be above the $160 per share that Elliott proposed.
“I think there’s better growth days ahead for the space as a whole, and in particular that there’s better growth days for athena,” Wieland said. “Athena is a software company. They’re a disruptive software company that’s in an industry that’s ripe for disruption.”
Last year, Apple was rumored to be weighing an acquisition. Wieland said he expects enterprise software companies like Oracle or Salesforce to be the top contenders if the company does decide on a sale.
Shares of athenahealth spiked more than 4 percent yesterday.