Change Healthcare ( NASDAQ: CHNG ) rose 6.4% after a federal judge denied a Dept. of Defense attempt to block the company's sale to UnitedHealth ( NYSE: UNH ).
Judge Carl Nichols also ordered UnitedHealth ( UNH ) to divest its ClaimsXten business to TPG Capital as proposed, according to a copy of the one-page judgement viewed by Seeking Alpha.
The DOJ sued to block UnitedHealth's ( UNH ) $8 billion planned purchase of Change ( CHNG ) in late February. The DOJ alleged that the proposed deal would "harm competition" in commercial health insurance markets, as well as in the market for a technology used by health insurers to process health insurance claims and reduce health care costs.
Earlier on Tuesday Citi analyst Daniel Grosslight cut Change Healthcare ( CHNG ) to neutral, writing that a deal close with UnitedHealth is a "near certainty."
"While the DOJ can theoretically appeal this decision (as they did the AT&T/Time Warner deal), we think it is a near certainty that the deal does go through," Grosslight wrote.
Jonathan Kanter, the head of the DOJ's antitrust division, said he disagrees with decision and is evaluating next steps.
“We respectfully disagree with the court’s decision and are reviewing the opinion closely to evaluate next steps," Kanter said in a statement.
UnitedHealth a greed to originally purchase CHNG for $25.75/share in January 2021, though the price was changed to $27.75/share, which includes a $2/share dividend, when the merger agreement was extended in early April.
Also see, LHC Group ( LHCG ), One Medical ( ONEM ) rose after judge approved Change Healthcare/UNH deal.
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Why did Change Healthcare stock jump? Won court approval for UnitedHealth deal