HBO & Co.'s Shrs Down 9% On Key Executive's
Departure
By RAYMOND HENNESSEY
Dow Jones Newswires
NEW YORK -- HBO & Co.'s (HBOC) shares were trading down 9% Friday morning after the
surprise announcement that Jay P. Gilbertson, its co-president, co-chief operating officer and chief
financial officer, had resigned.
There was talk that Gilbertson would leave the health-care information systems company after HBO
was acquired by McKesson Corp. (MCK). McKesson announced its acquisition of HBO in October.
Gilbertson was slated to share the title of group president for health-care information systems with
Albert Bergonzi, who shared the president's title with Gilbertson and Charlie McCall, the chairman and
chief executive.
It's not unusual for top executives from an acquired company to either be squeezed out or leave after
the acquisition is closed, but the timing of Gilbertson's departure - well before its anticipated close in
the first quarter of 1999 - is what is most surprising, said CIBC Oppenheimer Corp. analyst Benjamin
Rooks.
In addition, because Gilbertson was financial chief, chief accounting officer and treasurer, he was more
important to McKesson, primarily a drug distributor, than other HBO executives, Rooks said.
"HBOC assured me that they were keeping their accounting staff," Rooks said. "Software accounting
is very different than other accounting, so you need people with that ability."
Rooks speculated that, because there's a lack of qualified chief executive candidates in the country,
Gilbertson may have been wooed by headhunters when the deal was announced.
Also, despite being named to the combined company's management team, he may have felt there was
really no future there, Rooks said. While viewed as second in line to replace McCall at HBO, he
would be behind several others to succeed McKesson's chairman and chief executive, Mark Pulido.
"He may have figured that he's not going to get the corner office, Pulido didn't want him, so he should
just go," Rooks said.
HBO's Nasdaq-listed shares recently were down 2 3/16, or 8.7%, at 23 on volume of 11.3 million,
compared with average daily volume of 6.2 million. Earlier, the shares traded as low as 21 3/4.
Access Health Inc. (ACCS), which is in the process of being bought by HBO,
was down 3 1/4, or 9.1%, to 32 5/8, after trading as low as 31 1/8 earlier.
McKesson was up 1/8 to 71 13/16.
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