SunLink fires back at Berggruen, says company won't be pushed into cheap sale

By Lisa Kerner

Charlotte, N.C., Jan. 24 - SunLink Health Systems, Inc. chairman Robert M. Thornton Jr. said the company's board of directors has "no duty to respond" to Berggruen Holdings North America Ltd. but did acknowledge receipt of the investor's letters on Jan. 11 and Jan. 18.

Thornton's comments were made in a Jan. 23 letter to Berggruen and included in a form 8-K filing with the Securities and Exchange Commission.

In the letter, Thornton accused Berggruen of "attempting to force a quick, and if possible cheap, sale of SunLink."

Regarding Berggruen's questioning of the independence of SunLink's special committee, Thornton said it "has no need or reason to be 'independent' of the entire board" or to have counsel different from SunLink's general counsel.

Thornton reiterated that the board will perform its duties with "care and diligence" without instruction from "third parties pursuing their own economic interests to the potential detriment of other shareholders."

"The board is evaluating the offer by Resurgence and SunLink will reply when that evaluation is concluded. No amount of drum beating, letter writing, inspection demands or other stirring the pot will change this," Thornton said in the letter.

In a Jan. 22 letter to SunLink, Berggruen said SunLink's board had failed to address the investor's concerns about the members of the special committee or how their independence was determined. In particular, Berggruen questioned board member Howard Turner's "close personal and professional ties to management," it was previously reported.

Resurgence Health Group LLC offered to acquire SunLink for $7.50 per share in cash. Berggruen, SunLink's second-largest shareholder, teamed with Resurgence and agreed to provide the equity financing needed for Resurgence to close the transaction.

Resurgence is an Atlanta-based privately held company formed to acquire and operate rural and other small hospitals.

SunLink, also based in Atlanta, provides health-care services through the operation of exurban and rural community hospitals.

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