HealthSpring board to review Clinton Group proposal to increase shareholder value

By Lisa Kerner

Charlotte, N.C., June 28 - HealthSpring, Inc. chairman, president and chief executive officer Herbert A. Fitch responded to the Clinton Group, Inc.'s June 26 letter and filing of a schedule 13D with the Securities and Exchange Commission.

Fitch said he brought the letter to the company's board of directors.

"The views of our stockholders are very important to us and we welcome their input and perspectives," Fitch wrote in a form 8-K filing with the SEC. "Our board of directors and management are committed to exploring how best to build stockholder value and, in that context, will review the suggestions made in your filing and letters and will give them appropriate consideration. I will be contacting you to arrange a time when we can further discuss your ideas."

HealthSpring investors led by Clinton Group shared their proposal designed to increase shareholder value with the company's full board after Fitch did not reply to Clinton's June 15 letter outlining the investors' recommendations. Clinton Group's senior managing director Conrad Bringsjord invited the board to meet and discuss the proposal.

The investor recommended the company "execute a leveraged recapitalization in conjunction with a Dutch tender offer for approximately 30% of the outstanding shares of the company at a reasonable premium to the current market prices." The suggested range for the Dutch tender is $22 to $23 per share.

HealthSpring should also consider a "modest $338 million credit facility borrowing (revolver and term loan B)."

Funds and accounts managed by Clinton Group beneficially own approximately 5% of the outstanding shares of HealthSpring.

HealthSpring is a Nashville-based managed care organization.

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