When American Health Services, Inc., a D.C.-based owner-operator of hospitals, announced its intent to go private in March, it was a quiet move that most observers at the time believed made sense for the small company.
But some shareholders are unhappy because of what they see as lack of communication from the company and dissatisfaction with the proposed buy-out package.
The plan which was filed June 21 with the Securities and Exchange Commission for approval on the proxy material, proposes a cash payment per share of $1 plus a $10.80 subordinated unsecured debenture with a 12 percent coupon maturing in 10 years to each public stockholder.
About 62 percent of the controlling interest in American is held by three private companies. And of those, Melvyn Estrin, president; Dr. Hyman Frankel, vice president; Charles Abod, treasurer; and Dr. Sheldon Steinberg, director of American, own 90 percent of the stock.
The board approved the proposal to go private June 7 and expects approval from the SEC soon with a stockholders meeting planned shortly thereafter.
Meanwhile, some stockholders have complained in interviews they have been kept in the dark concerning American's proposal and correspondence to the company frequently has been unanswered.
Some investors have yet to receive a copy of the 1978 annual report and accounts of the plan to form a private company held by the current major stockholders were read in newspapers or passed along by word of mouth.
According to Abod, the company has been waiting to get its proxy material in order before formally notifying shareholders.In any case, he said, since the proposal was announced response from public holders so far "is nothing significant."
Thomson McKinnon Securities was asked for an evaluation of the offer and according to Alan Arsht, associate director for corporate finance, "we believe the consideration is fair to stockholders."
One shareholder, who asked not to be identified, speculated the company might be offering a low package in anticipation of a larger per share offer to buy American from another concern.
However, Anthony G. Polak, president of Equity Interest Inc., New York, and a shareholder sees nothing unusual about the firm's actions. "It doesn't pay for them to be public unless they want to float more stock," he said.
Still, like most shareholders, he believes the offer is too low and should be placed around $20 a share.
Similarly, Lawrence J. Goldstein, securities analyst at Drexel Burnham Lambert in New York, sees the offer as "inadequate." "The company could liquidate for more than the package they offer," he said.
Company sources said the move was intended to help get financing. But Goldstein observed, "I don't see why the company needs financing. But if they did, they should not have any problem. This is a strong company and strong in relation to other companies in the industry."