Berggruen, SunLink continue war of words over corporate governance, $7.50-per-share offer

By Lisa Kerner

Charlotte, N.C., Feb. 1 - SunLink Health Systems, Inc. investors led by Berggruen Holdings North America Ltd. were shocked at the company's "nonchalant and cavalier approach" to Berggruen's offer to acquire the company.

In a Feb. 1 letter to SunLink's board, Berggruen chief operating officer Jared S. Bluestein implied that SunLink chairman Robert M. Thornton, Jr. runs the company like his personal candy store.

"Apparently, he is severely misguided with respect to appropriate corporate governance practices and/or is receiving questionable advice about the board's fiduciary duties to its shareholders," Bluestein said in the letter.

The letter was included as part of a schedule 13D filing with the Securities and Exchange Commission.

Berggruen does not believe Thornton speaks for the entire board or that the board has "abrogated its fiduciary duties."

According to the shareholder, SunLink management has failed in the past 24 months to enhance shareholder value and instead has "impeded multiple transactions offering liquidity to shareholders at a premium to market price."

In closing, Bluestein assured SunLink's board that "we are not going away" and advised the board to listen to the true owners of the company, its shareholders.

It was previously reported that Thornton felt SunLink's board had "no duty to respond" to Berggruen and accused the investor of "attempting to force a quick, and if possible cheap, sale of SunLink."

SunLink's board is evaluating a $7.50-per-share offer by Resurgence Health Group LLC for the company. Berggruen, SunLink's second-largest shareholder, teamed with Resurgence and agreed to provide the equity financing needed for Resurgence to close the transaction.

Resurgence is an Atlanta-based privately held company formed to acquire and operate rural and other small hospitals.

SunLink, also based in Atlanta, provides health-care services through the operation of exurban and rural community hospitals.

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