Reuters: Private Equity: UPDATE 3-Allscripts shareholder demands CEO resignation

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UPDATE 3-Allscripts shareholder demands CEO resignation Apr 30th 2012, 18:37 Mon Apr 30, 2012 2:37pm EDT * Healthcor Management demands CEO Tullman's resignation * Allscripts names Dennis Chookaszian chairman * Co expands stock repurchase program to $400 mln * Shares up 7 pct April 30 (Reuters) - One of Allscripts Healthcare Solutions Inc's largest shareholders demanded that its chief executive Glen Tullman resign, hours after the company named a new chairman as part of a major management overhaul. The fund, HealthCor Management LP, which owns about 5 percent of Allscripts's outstanding shares, cited problems with execution and leadership at the company for what it called the stock's underperformance compared with its peers. CEO Tullman, who led Allscripts through its initial public offering, has been with the company for the last 15 years, during which its size has doubled, according to Allscripts' website. "We believe the value of this company is significantly higher than the current public valuation," the private equity fund said in a regulatory filing. Speaking in the context of other acquisitions in the healthcare IT space, the fund said Allscripts' shares are "being valued well below any reasonable acquisition price" at its Friday close of $10.30. Earlier in the day, Allscripts appointed Dennis Chookaszian as chairman, replacing Phil Pead, whose contract was terminated last week prompting three other directors to resign. The management shakeup, announced along with a weak full-year profit forecast on Thursday, also included the resignation of chief financial officer Bill Davis. Citi Investment Research & Analysis, among other brokerages, downgraded the stock, suspecting a power struggle. The spate of bad news also triggered a wide selloff, sending the stock down 36 percent on Friday on the Nasdaq. The shares were up 7 percent at $10.97 on Monday. Chairman Chookaszian, who has been a board member since September 2010, also serves as a director on the boards of for-profit education company Career Development Corporations and real-estate information provider LoopNet. Allscripts' poor profit forecast followed weaker-than-expected quarterly results, as the healthcare IT service provider sees high software development costs and fewer bookings. The Chicago-based company also doubled its share repurchase program to $400 million. Link this Share this Digg this Email Reprints

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