AMSG Amsurg Corp.

Team Health Holdings Inc. on Wednesday announced an agreement with activist investor Jana Partners, the latest company to give up board seats to prevent a proxy fight.

Just weeks after Jana took a stake in Team Health to shake up the health-care staffing firm's board, the Knoxville, Tenn.-based company said Scott Ostfeld, partner at Jana, and Edwin Crawford, former chairman of CVS Caremark Corp., would join its board of directors effective immediately.

Jana last month revealed that it had bought up about 8% of the company's outstanding shares and announced its intention to nominate three directors to its board, criticizing Team Health for "missteps in critical areas including capital allocation, strategy and governance."

Jana jumped in following Team Health's decision to rebuff a $5 billion takeover attempt by fellow health-care staffing company AmSurg Corp. The bid, eventually withdrawn amid Team Health's resistance, represented a 36% premium to where the stock was trading at the time. Investors balked at the decision, sending shares 21% lower through Tuesday's close.

In addition to Mr. Ostfeld and Mr. Crawford, Jana had proposed Nancy Schlichting, chief executive of the Henry Ford Health System. As part of the agreement struck Wednesday, Team Health said it would add Ms. Schlichting as a "class 2" director next year. Team Health said the deal includes a promise to cut the size of the board by one director each year over the next three years, bringing the board down from its current slate of 12.

"We are pleased to have reached this agreement with Jana," said Team Health Chief Executive Mike Snow, adding that the new directors "will add valuable perspective to TeamHealth's board as we execute on our strategic plan."

Jana managing partner Barry Rosenstein praised the company's "constructive approach" in reaching the agreement.

For Team Health, the agreement is an effort to fend off a proxy fight. It joins a growing cadre of companies opting to concede seats and prevent a battle with an activist. Design-software maker Autodesk Inc., under pressure from Sachem Head Capital Management, earlier this month agreed to add three directors to its board.

Last month, billionaire investors Carl Icahn and John Paulson dropped their public fight with American International Group Inc., agreeing to stand down for a year in exchange for two board seats. Mr. Icahn made a similar deal with Cheniere Energy Inc. last year when the company added two board members he proposed.

Other companies, meanwhile, have resisted granting supervision to activists, instead naming their own new directors. Yahoo Inc.—in the midst of a battle with activist investor Starboard Value LP—this month appointed two board members without any involvement from Starboard. United Continental Holdings Inc. recently made a similar move of its own in appointing new directors just ahead of a proxy fight.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

March 23, 2016 10:15 ET (14:15 GMT)

Amsurg Corp. (NASDAQ:AMSG)
Historical Stock Chart
From Mar 2024 to Apr 2024

Amsurg Corp. (NASDAQ:AMSG)
Historical Stock Chart
From Apr 2023 to Apr 2024