Optum's Decision To Target Amedisys Is Intriguing, Says Analyst - Amedisys (NASDAQ:AMED)

Optum Care Solutions, a subsidiary of UnitedHealth Group Inc UNH, has submitted an all-cash proposal to the Board of Directors of Amedisys Inc AMED.
The $100 per share all-cash transaction represents a 26% premium over Amedisys' most recent closing share price and a premium of 29% to the unaffected Amedisys share price of $77.26.
Optum's proposal has no financing contingency or condition and does not require shareholder approval.
The Amedisys board is evaluating the competing offer. It has not yet been determined that it constitutes a superior proposal, and the board's recommendation in favor of the merger agreement with Option Care Health Inc OPCH remains in effect.
Option Care responded to the news by reiterating the combined entity's near- and long-term value-creation opportunities, including $9 billion in revenue and roughly $1 billion in EBITDA by 2027.
According to William Blair, the news of a payer outbidding for Amedisys (Outperform rating) should not be seen as highly surprising, considering the comparatively low breakup fee of $106 million and the current trend of payers aggressively pursuing home-based labor.
However, the fact that Optum is making a move is somewhat unexpected, considering its recent acquisition of LHC Group earlier this year. Amedisys and LHC Group were the last two major independent home health businesses, making Optum's decision to target Amedisys intriguing.
While regulatory scrutiny may be anticipated, the analyst believes that Optum's previous experience with the FTC during the LHC Group acquisition likely provides them with confidence that this deal will successfully close.
Price Action: AMED shares are up 14.75% at $91.19 on the last check Monday.

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