AMED - Optum bid for Amedisys a surprise though likely to get antitrust approval - analysts

2023-06-05 12:21:29 ET

While Optum's $100 a share all-cash bid for Amedisys ( NASDAQ: AMED ) came as a surprise, the deal will likely be able to clear antitrust approval, according to analysts at Jefferies and UBS.

"The news came as a surprise to us, particularly after UNH recently closed on its acquisition of LHCG e arlier this year," UBS analyst Andrew Mok wrote in a note on Monday.

While the deal will likely be scrutinized by the Federal Trade Commission, a market-level analysis of market shares points to an approvable transaction as the combined market shares of both companies are under 10%, Jefferies analyst Brian Tanquilut wrote in a note. The companies will likely need to make some divestitures in certain markets to secure FTC clearance.

Option Care ( NASDAQ: OPCH ) could look to increase its current all-stock deal with Amedisys ( AMED ) with a cash component, though that's likely to face shareholder pushback, according to Tanquilut.

"Absent an adjustment of OPCH's bid with a cash component and a change to the exchange ratio, AMED's board, given its fiduciary duty, will likely favor UNH's $100 all-cash bid, as long as they can get comfortable with anti-trust risk, Tanquilut wrote. "We do not foresee other competing bids for AMED at this point."

Earlier Monday, CNBC's David Faber reported Option Care ( OPCH ) was going to have a "very hard time" getting the vote for its planned  Amedisys ( AMED ) deal. He also downplayed antitrust concerns about a UnitedHealth  ( NYSE: UNH ) combination with Amedisys.

Amedisys ( AMED ) rose 15% on Monday on the news of the Optum bid, while Option Care ( OPCH ) climbed 7.2%.

"All said, we think Optum's all-cash bid will be well received by AMED investors and viewed as the preferred offer on the table," UBS's Mok wrote.

More on Amedisys, Option Care and Optum

• Amedisys And Option Care Health: High-Probability Merger Arb
• Option Care Health Reiterates Value Creation Opportunity of its Previously Announced Definitive Merger Agreement with Amedisys

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