Paul Singer's hedge fund just bought a big chunk of this small health-care company

  • Elliott Management has acquired a 7 percent stake in Mednax.
  • Paul Singer's hedge fund wants to "maximize shareholder value" for the company.
  • Elliott is asking Mednax to consider a sale of the company.
Paul Singer
David A. Grogan | CNBC
Paul Singer

Activist hedge-fund billionaire Paul Singer has taken a 7 percent stake in small American health-care company Mednax and is asking the board of directors to consider a sale of the company.

Singer's hedge fund, Elliott Management, disclosed the new stock acquisition on Thursday in a filing with the Securities and Exchange Commission.

Elliott, which holds at least $34 billion under management, owns a combined $84.9 million in Mednax Common Stock. Of that amount, Elliott International, a Cayman Islands-based subsidiary, owns shares worth $57.7 million at the Nov. 3 closing price of $43.37 apiece.

In the government filing, Elliott argues that shares of Mednax, a Florida health-care company providing subspecialty medical services across the country, are "undervalued." The hedge fund says it seeks to "engage in a constructive dialogue" with regard to "strategic options and operational opportunities to maximize shareholder value."

Among those options, Elliott is asking the Mednax board of directors to consider "without limitation, a sale of the Issuer or certain of its businesses or assets ... as a means of enhancing shareholder value."

Mednax stock jumped more than 11 percent to $51.07 per share on Thursday.