5 Apria Directors Resign

Apria Healthcare Group Inc.’s board of directors voted Wednesday to call off the company’s search for a possible merger partner and press ahead as an independent company.

At the conclusion of a four-hour meeting Wednesday, five directors of the Costa Mesa company resigned, including two who were involved in potential bids for the company--Orange County developer George L. Argyros and investment banker Frederick S. Moseley.

A source said all five voluntarily stepped down at the urging of Ralph V. Whitworth, who replaced Argyros last month as chairman of the nation’s largest home health-care company. Whitworth, a former shareholder activist, is an executive at Relational Investors, Apria’s largest shareholder with a 9.9% stake.

Argyros said through a spokesman that he resigned to “maximize flexibility” in managing his sizable Apria stock holdings. His 5.4% stake in the company--worth more than $90 million two years ago--is now valued at less than $30 million.

Moseley couldn’t be reached for comment.

The announcement came after the stock markets closed Wednesday. Apria shares rose 13 cents, to $9, in New York Stock Exchange trading.

Whitworth said the resignations “allow us to reconfigure the board so that it functions better.” He has blamed much of the financially wayward company’s troubles on a board that had been split ever since Apria was formed in the 1995 merger of two Orange County rivals--Homedco Group Inc. and Abbey Healthcare Group Inc.

Other directors resigning Wednesday were Jeremy M. Jones, who had stepped down as Apria’s chairman and chief executive in January; PacifiCare Health Systems Inc. Chairman Terry Hartshorn; and Vincent M. Prager.

Now that the company’s board has shrunk to six members, Whitworth said Apria will reach out to shareholders for nominees of possible new directors.

The company will hold its annual meeting July 28. Whitworth said the company has a couple of weeks to compile a proxy listing board nominees in advance of the meeting.