Amedisys investor seeks board seat

KKR Asset Management, with 14.9% stake, seeks seat on board

After amassing a 14.9 percent stake in Amedisys Inc. in the past year, KKR Asset Management has made its first move as an activist shareholder: asking that one of its executives be nominated immediately to the Baton Rouge home health provider’s board of directors.

KKR Asset Management controls 4.8 million shares of Amedisys’ stock, according to its latest filing with the U.S. Securities and Exchange Commission. In its Jan. 31 request, KKR Asset Management asked that Nathaniel Zilkha, the company’s head of credit, be nominated to Amedisys’ board.

Amedisys issued a statement Wednesday saying its board and management are always open to hearing suggestions from shareholders about how to achieve long-term shareholder value.

KKR Asset Management could not be reached for comment.

Sheryl Skolnick, co-head of research at CRT Capital Group, said discussions with management over strategy are usually the first step by a shareholder looking to become active in a company’s strategy.

“If those discussions don’t work, you typically see them saying, ‘Fine. We’d like a board seat,’ ” Skolnick said. “Oftentimes it’s the first salvo in a fight for control of a board in a company, which could very well happen here.”

It will be interesting to see Amedisys’ response, Skolnick said. The fact that the company hasn’t responded suggests Amedisys and its largest investor, KKR Asset Management, are talking.

A proxy fight would be expensive, and it’s unclear whether Amedisys is willing to expend those resources, she said.

“They might just say, ‘You know what. Nathaniel Zilkha … is a very talented health care executive. … He’s been on a number of health care boards. … Maybe they could actually learn something and benefit from his insight and guidance,’ ” Skolnick said.

In August, KKR Asset Management revealed that it had acquired 8.5 percent of Amedisys’ stock. Amedisys shares jumped more than 22 percent in a single day.

In that filing, the investment fund said it may have discussions with management, Amedisys’ board of directors and other shareholders, or take other actions concerning any “extraordinary corporate transaction.” Those transactions may include a merger, reorganization or liquidation.

KKR Asset Management’s investment strategy includes investing in distressed companies and other opportunistic situations. The company’s portfolio also focuses on bank loans, direct lending and mezzanine financing, which allows the lender to convert a loan to ownership or equity in the borrower.

Amedisys shares rose 22 cents, or about 1.5 percent, to close Wednesday at $15.08. Its 52-week trading range is $8.81 to $18.70.