NYSE: SEM SELECT MEDICAL HOLDINGS CORP 8-K

Select Medical adds merger proxy disclosures amid shareholder litigation over $20/share buyout

Filed June 22, 2026 · Period ending June 22, 2026 · ~1 min read

Key Changes

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Three lawsuits and eleven demand letters filed by shareholders allege the merger proxy omits material information; company denies wrongdoing but provides supplemental disclosures to avoid litigation delays.

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Executive Chairman Ortenzio to receive $2.9M and Senior EVP Jackson $0.2M in transaction fees after closing, in addition to previously disclosed change-in-control payments, for their roles structuring the buyout.

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Goldman Sachs contacted nine alternative bidders in January 2026; seven declined and two did not respond, indicating limited competitive interest in acquiring the company.

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Added granular valuation details including Goldman's terminal year free cash flow estimate of $484M, discount rates of 10-12%, and precedent transaction premia ranging from 12.3% to 76.8%.

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Summary

Select Medical filed supplemental proxy disclosures in response to shareholder litigation challenging its pending $20/share going-private merger. Three lawsuits and eleven demand letters allege the original proxy statement omitted material information about the transaction. While the company denies any wrongdoing, it is providing additional disclosures to moot the claims and avoid delays to the merger timeline.

The supplemental disclosures reveal that Executive Chairman Robert Ortenzio will receive approximately $2.9 million in transaction fees after closing, and Senior EVP Martin Jackson will receive $0.2 million, compensating them for their roles in structuring and negotiating the buyout.

The company also disclosed that Goldman Sachs contacted nine potential alternative bidders in January 2026 at the Special Committee's direction, but seven declined interest and two did not respond, supporting the conclusion that the consortium's offer was the best available. Additional technical details were added to Goldman's valuation methodologies, including terminal cash flow estimates and precedent transaction comparisons. For shareholders, the litigation itself is common in going-private transactions and does not necessarily indicate problems with the deal. The key takeaway is that the sale process appears to have been thorough, with limited competitive interest from alternative bidders, and the supplemental disclosures provide transparency on executive compensation tied to the transaction.

Section-by-Section Diff

Event · Item 8.01 — Other Events

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Select Medical disclosed supplemental proxy disclosures in response to shareholder litigation over its pending $20/share going-private merger.

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Added Shareholder litigation over merger proxy disclosures medium

Added in current filing · verify on EDGAR →

As of the date of this Current Report on Form 8-K, two complaints have been filed in the Supreme Court of the State of New York, County of New York (the “New York Complaints”) and one complaint has been filed in the Court of Common Pleas of Cumberland County, Pennsylvania, Ninth Judicial District (the “Pennsylvania Complaint,” and together with the New York Complaints, the “Complaints”). ... The Complaints generally allege that the Definitive Proxy Statement misrepresents and/or omits certain purportedly material information regarding the Merger. ... The Complaints seek, among other things, to enjoin the consummation of the Merger and attorneys’ fees. ... In addition, the Company has received demand letters from eleven purported stockholders of the Company (together with the Complaints, the “Matters”) alleging similar deficiencies regarding the disclosures made in the Definitive Proxy Statement regarding the Merger, and seeking additional disclosures in the Definitive Proxy Statement to address those purported deficiencies.

Three lawsuits and eleven demand letters have been filed by shareholders alleging the merger proxy statement omits material information. The complaints seek to block the merger and claim damages. While the company denies wrongdoing, it is providing supplemental disclosures to moot the claims and avoid litigation delays. Such disclosure litigation is common in going-private transactions but can delay closing or increase costs.

Added Expanded background on merger process and bidder outreach medium

Added in current filing · verify on EDGAR →

During the week of January 19, 2026, representatives of Goldman Sachs contacted nine potential bidders (other than the Buyer Consortium), four of which were potential strategic bidders and five of which were potential financial sponsor bidders, at the direction of the Special Committee. Ultimately, seven of the potential bidders stated they did not have interest in pursuing a transaction with the Company, and the remaining two did not respond to the outreach by representatives of Goldman Sachs.

The company disclosed that Goldman Sachs contacted nine potential alternative bidders in January 2026 at the Special Committee's direction. Seven declined interest and two did not respond, indicating limited competitive interest in acquiring the company. This disclosure provides transparency on the sale process and supports the Special Committee's conclusion that the consortium's offer was the best available. The supplemental disclosure also clarified that discussions about separating the critical illness recovery hospital segment began in late June 2025.

Show 1 minor / wording change

Added Additional valuation methodology details low

Added in current filing · verify on EDGAR →

Using the mid-year convention for discounting cash flows and discount rates ranging from 10.0% to 12.0%, reflecting estimates of the Company’s weighted average cost of capital, Goldman Sachs discounted to present value as of December 31, 2025, (i) estimates of unlevered free cash flow for the Company for the fiscal years 2026 through 2035, as reflected in the Forecasts and (ii) a range of illustrative terminal values for the Company, which were calculated by applying perpetuity growth rates ranging from 1.5% to 2.5%, to a terminal year estimate of the unlevered free cash flow of $484 million to be generated by the Company

The company added granular details to Goldman Sachs' discounted cash flow analysis, including the terminal year unlevered free cash flow estimate of $484 million, specific debt and cash figures used ($1.845 billion debt, $27 million cash), and the range of fully diluted shares (125-128 million). Similar detail was added for the present value of future share price analysis and precedent transaction analysis. A full table of 18 precedent healthcare transactions with premia ranging from 12.3% to 76.8% was also added. These disclosures respond to shareholder claims that the valuation methodologies were insufficiently detailed.