Thursday, May 24, 2018
Business

Four players fighting today's broad buffet of economic pressures

What do Bayfront Hospital's owner, SeaWorld orcas, Bill Edwards' mortgage firm and Bristol-Myers Squibb's expansion here have in common? They are all under rising economic pressures brought on by lawsuits, activists, a lending crunch and rising costs. And they all bear watching.

4. Ever since Health Management Associates in Naples bought St. Petersburg's Bayfront Medical Center this past spring, the publicly traded hospital chain has battled takeover rumors, a hedge fund investor's push for a new board and — now — a lawsuit from a pension fund investor.

As reported by Bloomberg News, the police pension fund in the Broward County town of Davie alleges HMA's current board is abusing its power by trying to "strong-arm" investors into rejecting a bid to replace HMA's board. The lawsuit claims HMA loans include provisions that accelerate debt payments if the board of directors is removed — an event that the current board warns could endanger HMA's future. It's the latest legal swordplay between HMA and hedge fund Glenview Capital Management's push for new HMA directors. Now comes a recent CNBC report suggesting talk of an HMA takeover may be subsiding. All of this corporate theater by Bayfront's new owner must be unsettling to a St. Pete hospital that agreed to be purchased for the sake of better financial security.

3. Weeks after the Federal Trade Commission levied a record fine on Bill Edwards' Mortgage Investors Corp. for violating telemarketing "do not call" rules, the company said it will lay off 380 employees. Edwards blames rising interest rates and a dysfunctional secondary mortgage market for a drop in business.

Some help may be on the way. Regulators may ease a proposal that banks keep part of the mortgage securities they sell to investors. If that occurs, it would be (as the Wall Street Journal says) a "major U-turn" for regulators enforcing the 2010 Dodd-Frank financial overhaul law.

But is it enough?

2. Tampa's Busch Gardens does not have killer whales. But that does not ease any concern over the new documentary film Blackfish, which chronicles what may have caused the 12,000-pound orca Tilikum to kill a SeaWorld trainer in 2010 and two other people in the 1990s.

No longer owned by Anheuser-Busch, Busch Gardens is part of the theme park spinoff SeaWorld Entertainment whose shares have risen since going public this spring.

Will Blackfish hurt the stock? One critic calls it "lacerating in its indictment of SeaWorld." It opens in Los Angeles and New York on Friday.

1. On the heels of last week's blockbuster expansion announced for Hillsborough County, Bristol-Myers Squibb wasted no time this week announcing it will lay off 200 New Jersey workers. Lured by Florida incentives, the company will open a marketing, technology and finance operation in early 2014 in a yet-to-be-specified center. The 200 jobs lost in New Jersey will become local hires here.

The drugmaker cited New Jersey's high costs for the shift. Tampa will cut labor and location expenses, "while also reducing demand on our facilities in New Jersey."

It's a similar message we heard recently when New Jersey's Hertz said it's moving its HQ to Florida's Lee County.

Robert Trigaux can be reached at [email protected]

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