Shamrock to Magellan Health Services: Return excess capital to shareholders

By Lisa Kerner

Charlotte, N.C., Oct. 22 - Shamrock Capital Advisors, Inc., in a letter to Magellan Health Services, Inc.'s board of directors, urged the company to declare a $12-per-share special dividend. The letter was included as part of a Shamrock news release.

A Magellan shareholder since January 2006, Shamrock currently owns 1,822,878 shares, or 4.6%, of the company's common stock, according to the letter.

Shamrock noted the company's current forecast projecting $12 million of debt and approximately $315 million of unrestricted cash at year end. In addition, the investor said Magellan management indicated during a July 27 conference call that it has access to some $1.25 to $1.5 billion of capital from cash on hand and available debt capacity.

"Clearly, Magellan has the financial flexibility to add reasonable leverage to its balance sheet, return a portion of its excess capital to shareholders, while retaining adequate liquidity to pursue opportunistic acquisitions. Therefore, we recommend that the board should authorize a one-time special dividend of $478 million or approximately $12.00 per share," Shamrock said in its letter.

Magellan is a Farmington, Conn.-based provider of behavioral health care treatment services.

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