Amici Capital Discloses 5.7% Stake In Debased Accretive Health Inc. (ACHI)

The Board of Directors at Accretive has recently decided to review potential strategic alternatives to enhance shareholder value, which means that the company is exploring the possibility of acquisition by other companies, but does not exclude the possibility of remaining a stand-alone firm. This comes after Accretive received a buyout offer from Ascension Health of roughly 50% below its market value at the closing stock price on July 16. Ascension’s affiliated hospital systems provided approximately 50% of Accretive’s total gross cash from contracting activities in 2014 and the company asserted that it does not plan to renew its contract with Accretive when the existing agreement expires on August 6, 2017. This statement has put even more pressure on Accretive, which might actually be the reason why the management is currently reviewing different strategic alternatives.

Although Accretive is expected to report its financial results for the second quarter of 2015 after the market close on August 5, we will take a quick look at its previously-reported financials. The company posted revenues of $10.97 million for the first quarter, compared to $12.96 million reported for the same quarter a year ago. At the same time, Accretive reported a diluted net loss per share of $0.32, compared to a diluted net loss per share of $0.57 a year earlier.

So far, Amici is the only fund from our database that disclosed holding shares of Accretive, although it is not surprising, taking into account that it is a small-cap, OTC stock. It is not clear whether the fund purchased shares after their slump in order to benefit from the company’s turnaround, or in order to bet on a potential takeover. Nevertheless, this move could mean a bullish sign for the stock and we’ll keep a close eye to see if other large investors follow suit.

Disclosure: None