We have been Enhabit stockholders since the Spin-off in July 2022 and we have spent nearly two years engaging in good faith with the Board and advocating for improvements at the Company. We believe Enhabit is well-positioned to compete in the highly fragmented and secularly growing home health and hospice industries—industries that we expect to be a key part of the solution to our nation’s health care spending challenges, and which we anticipate will greatly benefit from the aging population.

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Despite these secular tailwinds, Enhabit's operating performance has been dismal over the past two years. We believe Enhabit’s stockholders have suffered from the Board’s failure to adequately supervise the Company’s inexperienced management team, which has struggled both to navigate industry challenges as dexterously as peers and to communicate effectively with investors. What the Board was in fact overseeing was, in our view, enormous destruction of stockholder value on an absolute basis and dramatic underperformance versus peers and the market in general.

 

We believe there is abundant evidence that Enhabit’s results have been inferior to peers in each of its operating segments (home health, hospice, and home office). Ultimately, it is our view that the responsibility for persistent underperformance lies squarely with the Board. Given the improving but still dynamic external landscape, we believe it is vital that the Board possess the industry-specific knowledge to rigorously evaluate management’s strategic and operational choices. Further, it is the Board’s responsibility to ensure the Company effectively navigates changing industry conditions, which its peers have been able to successfully do. The current Board has, we believe, utterly failed in its stewardship of the Company. 

Enhabit stockholders urgently need Board members with hands-on home health and hospice experience. They need directors who possess the expertise required to create value and who are specifically focused on that objective—precisely what the AREX Nominees bring. AREX has meticulously selected and nominated a diverse, highly qualified group of directors who can apply their extensive industry expertise to address Enhabit’s challenges. The AREX Nominees bring proven operational experience across all facets of home health and hospice, including operations, clinical activity, and business development. Collectively, the AREX Nominees have a deep understanding of managing payor relationships and a comprehensive grasp of capital markets. If elected, the AREX Nominees plan to form a dedicated Transformation Committee of the Board to work seamlessly with management to rehabilitate Enhabit.

 

Our fellow stockholders deserve a Board that has industry expertise, understands the importance of open and constructive engagement with its stockholders, and is committed to maximizing value for all stockholders. We believe the AREX Nominees are the right candidates to catalyze these important changes at Enhabit.