AREX Capital Announces Director Appointment to Enhabit Board

By: AREX Capital Management, LP via Business Wire

July 29, 2024 at 09:00 AM EDT

Leading Proxy Advisors and Stockholders Supported Mandate for Change

AREX Capital Management, LP (together with its affiliates, “AREX”), the beneficial owner of approximately 4.9% of the outstanding common shares of Enhabit, Inc. (NYSE: EHAB) (“Enhabit” or the “Company”), today commented on the outcome of Enhabit’s 2024 Annual Meeting of Stockholders (the “Annual Meeting”), in which stockholders elected Mark W. Ohlendorf to the Company’s board of directors (the “Board”).

AREX Managing Partner, Andrew Rechtschaffen, and Partner, James T. Corcoran, commented:

“We are pleased that stockholders have elected Mark W. Ohlendorf to the Board. Mark will add critically needed financial expertise and oversight, and we look forward to improved financial reporting, guidance accuracy, and investor communications.

Our campaign engaged in a detailed, facts-based discussion highlighting Enhabit’s poor financial and operational performance during its first two years as a public company and proposed specific strategies for achieving significantly better results in the future. It is essential that Enhabit immediately abandon the culture of blaming external factors for its results, and that the Board begins to firmly enforce a culture of accountability and the pursuit of excellence.

One thing is clear—the Board should not interpret this outcome as a mandate for the status quo or as stockholder approval of its efforts to date. Beyond Mr. Ohlendorf, three of our other nominees each received more than 40% of votes cast, and stockholders withheld significant support from three of the continuing directors. Moreover, both leading proxy advisory firms, Institutional Shareholder Services Inc. and Glass, Lewis, & Co., agreed with our view that Enhabit would benefit from additional home health and hospice expertise and recommended that three directors be replaced.

Stockholders have clearly put the Board on notice that the era of underperforming expectations and making excuses must end, and that a new era of achieving meaningfully improved results commensurate with the Company’s immense potential must begin. It is imperative that the Board do everything in its power to help correct Enhabit’s severe undervaluation and drive better outcomes for stockholders.

We look forward to remaining highly engaged with the Company.”

About AREX

AREX Capital Management, LP is a value-oriented investment firm based in New York City. AREX takes a long-term, opportunistic approach to investing and focuses primarily on publicly traded companies with significant, unrealized potential.