Healthways adds board member ahead of proxy fight

Franklin health services company Healthways Inc. has added a new board member – long-time investor Daniel Englander – ahead of a probable proxy fight.

Healthways’ chairman of the board, John Ballantine, said Englander's financial know-how would benefit the company. Englander is the founder and managing director of New York-based investment firm Ursala Capital Partners.

“He has been an investor in Healthways since 2005, knows our business well and understands the markets for our well-being improvement solutions," Ballantine said in a statement. "We look forward to working with him as he provides additional strategic, financial and public markets insight into the Board’s deliberations.”

Englander, 44, was a managing partner at another New York investment firm, Allen & Company, before founding Ursula Capital Partners. He is also on the boards of two other public companies – used auto retailer America's Car-Mart Inc. and online car part commerce company Copart Inc.

He will join Healthways' board immediately and stand for election at the company's annual 2014 meeting, which is expected to be a challenging one for Healthways’ management.

Englander is joining a board that appears headed for a proxy fight.

Healthways' activist investor, Conan Laughlin, who runs Boston-based hedge fund North Tide Capital, has been pushing to oust current CEO Ben Leedle since December 2013. In February, Healthways co-founder Thomas Cigarran left his post on the board.

"I am no longer willing to continue as a director and watch this company fail to meet its potential and the reasonable expectations of its shareholders," Cigarran wrote in a letter that was filed with the Securities & Exchange Commission.

Laughlin is now pushing for himself and three other new members to be elected to Healthways board. The board membership will propose an alternative slate of board members.

Ballantine said Healthways had offered a counterproposal to North Tide regarding the board makeup, but the proposal was rejected.

In that proposal, there would have been a five-person slate of candidates in the election, including two North Tide nominees. The Healthways board would then have offered two candidates as part of the nomination slate. It also would have selected the fifth candidate, but North Tide would have reviewed that person before presenting him or her as a candidate.

That new slate of candidates would have been part of an expanded 12-member board of directors, instead of the current 10-member board.

Also as part of the board’s proposal to North Tide, the company would have conducted a strategic review committee to help refine and develop the company’s long-term strategy.

Reach Shelley DuBois at 615-259-8241 or sdubois@tennessean.com. Follow her on Twitter at @shelleydubois.