HealthCor wants Magellan Health to return cash to shareholders

By Lisa Kerner

Charlotte, N.C., March 18 - Magellan Health Services, Inc. investors led by HealthCor Management, LP, in a lengthy March 14 letter, urged the company to return cash to shareholders through a dividend or other comparable means.

HealthCor and its affiliates are no longer passive investors, according to a schedule 13D filing with the Securities and Exchange Commission.

Returning money to shareholders would improve Magellan's return on investment and demonstrate its commitment to maximizing shareholder value, the letter said. The letter was included in the SEC filing.

HealthCor said it is hopeful that the absence of Steve Shulman as chief executive officer will end Magellan's resistance to returning cash to shareholders.

While HealthCor praised Magellan's 42.7% revenue growth in the December quarter, it questioned the company's plan to diversify by using its high cash balances to make strategic acquisitions.

The reporting persons beneficially own 2.75 million shares, or 6.83%, of Magellan's outstanding common stock.

Magellan, located in Farmington, Conn., provides behavioral health care treatment services.

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