Shares of Irvine nursing home operator Sun Healthcare Group Inc. jumped today after one of its investors called for the company to be sold.
Sun shares were up 17% in early afternoon trading, with a market value of $92 million.
New York-based Clinton Group Inc. asked Sun’s directors to consider a sale in a letter. Clinton said its Clinton Magnolia Master Fund “is one of the top 15 shareholders of Sun” but did not specify the size of its stake.
Sun is undervalued in the public markets, and a sale would maximize shareholder value, Clinton said in a letter to the company’s directors.
Clinton’s letter mentioned that Sun’s stock price has fallen more than 75% since the start of 2011 and almost 10% since Aug. 1, and that “the market is pessimistic about the company’s ability to achieve its projections and thrive as an independent company.”
Sun’s board and management will review Clinton’s suggestions and “give them appropriate consideration,” said Chief Executive William Mathies in a letter to Clinton included in a Securities and Exchange Commission filing.
