Activist Barington pushes for Chemed to start a strategic review

Activist investor Barington Capital is escalating its campaign against Chemed Corp. (CHE) and wants the hospice service and Roto-Rooter owner to start a strategic review and change its board.

Barington Chairman and CEO James Mitarotonda said in a letter to Chemed’s board that the company has two “outstanding businesses whose value is not being maximized," according to a letter that was reviewed by Bloomberg.

“Simply put, we do not believe that Chemed has become a weaker company — in our opinion, it has become a less ambitious one that suffers from a lack of accountability and effective oversight,” Mitarotonda wrote in the letter.

Barington, which has a 0.43% stake in Chemed (CHE), wants the board to initiate a strategic review, reduce costs, including perks like the CEO's personal use of aircraft, and tickets for sporting events.

“Chemed maintains a regular dialogue with the investment community as part of our robust shareholder and analyst engagement program,” a spokesperson for Chemed said in an email to Bloomberg on Tuesday. “However, we do not comment on engagement with specific firms or individuals.”

Mitarotonda told Bloomberg in an interview last month that Barington had accumulated a stake in the healthcare services company and proposed a new board director. 

Shares of Chemed (CHE) fell 2.6% on Tuesday.

Chemed (CHE) is set to report Q2 results next Tuesday.