AmSurg Boosts Cash Part of Team Health Bid
November 02 2015 - 10:30AM
Dow Jones News
AmSurg Corp. on Monday increased the cash portion of its offer
for Team Health Holdings Inc. by $4 and gave the rival provider of
outsourced physician services a Tuesday deadline to engage in
talks.
A call seeking comment from a Team Health representative wasn't
immediately returned.
Amsurg's new proposal values Team Health at $69.32, a premium of
16% from the close Friday and 32% from Oct. 19, the day before The
Wall Street Journal reported on Amsurg's offer. However, the
cash-and-stock bid is below the offer's original value of $71.47
because of the subsequent 10% decline in Amsurg's stock price.
As a result, Amsurg's latest bid is valued closer to $5 billion,
whereas the previous offer was valued at more than $5 billion.
In its letter to Team Health's board, Amsurg argued that Team
Health's stock price has withstood the recent decline in the
hospital and emergency services sectors because of Amsurg's
offer.
"Absent our public proposal, Team Health would likely have
traded down," Amsurg said in the letter. "This revised proposal
would represent a 40% 'headline premium.'"
Amsurg added that the deal would be withdrawn by 4 p.m. Tuesday
if Team Health doesn't engage in talks.
The Knoxville, Tenn.-based Team Health rebuffed an AmSurg offer
in October, pointing to insufficient value and the benefits tied to
its planned deal to buy another outsourced-services provider, IPC
Healthcare Inc., for about $1.4 billion.
AmSurg, of Nashville, Tenn., had gone public with its offers in
an effort to put pressure on Team Health to negotiate a deal. There
is significant shareholder overlap between the two companies, which
could aid in that effort, according to people familiar with the
matter.
The combined company's ownership would be split 50-50 between
the two sets of shareholders.
Combining the two companies would create a major national
provider of outsourced physician services, with a network of more
than 1,200 hospitals and about 20,000 doctors.
It would have a significant presence in areas including
anesthesia, emergency services, radiology and neonatology. AmSurg
is a big player in so-called ambulatory surgery, with roughly 250
facilities that perform procedures that don't require an overnight
stay.
Because of the recent moves in stock price, Team Health is
considered the more valuable company. Team Health has a market
capitalization of $4.3 billion, while AmSurg is at $3.4
billion.
Consolidation waves have swept through both the hospital and
health-insurance industries, part of a broader surge in deal making
in health-care and other sectors of the economy in recent
years.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 02, 2015 10:15 ET (15:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Amsurg Corp. (NASDAQ:AMSG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Amsurg Corp. (NASDAQ:AMSG)
Historical Stock Chart
From Jul 2023 to Jul 2024