Amedisys and UnitedHealth Extend Merger Deadline: What's Going On?
Friday, Dec 27, 2024 11:21 am ET
4min read Amedisys Inc (NASDAQ:AMED) shares are trading higher on Friday after the company announced it extended its merger deadline with UnitedHealth Group Incorporated (NYSE:UNH). In an exchange filing, the companies entered into a waiver agreement, further advancing their merger deal, originally announced on June 26, 2023.
Under the terms of the agreement, Merger Sub, a wholly owned subsidiary of UnitedHealth, will merge with Amedisys, with Amedisys continuing to operate as a subsidiary of UnitedHealth Group. The companies have agreed to push their $3.3 billion merger deadline to next year. This extension follows intense scrutiny from the U.S. Department of Justice (DOJ), Reuters reports.
Over a month ago, the DOJ and three U.S. states filed a lawsuit to prevent the deal. They argued that the merger would harm competition in the home health services market. The waiver allows both Amedisys and UnitedHealth Group to extend the period during which they cannot terminate the merger due to delays.
The waiver also includes important financial and operational adjustments. The Regulatory Break Fee under the merger agreement is set at $275 million, which could increase to $325 million if certain divestiture milestones are not met. Additionally, the waiver modifies certain operational restrictions and closing conditions, particularly those related to government approvals, and increases the revenue-related aspect of the "Burdensome Condition" definition.
Despite regulatory scrutiny and potential challenges, this waiver marks a key development in the ongoing efforts to finalize the merger. The companies continue to work toward completing the deal, which is expected to provide both parties substantial synergies and growth opportunities.
Price Action: UNH shares are trading lower by 0.52% to $508.47 at last check Friday. AMED is up 4.48%.
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UnitedHealth (NYSE:UNH) and Amedisys (NASDAQ:AMED) just hit the pause button on their $3.3 billion mergeragain. The deal, originally announced in June 2023, is facing stiff resistance from the DOJ, which isn't thrilled about the potential impact on competition in the home health and hospice market. Despite sweetening the pot with a $100-per-share cash offer (a 26% premium), UnitedHealth's Optum unit has been stuck in a legal back-and-forth, with regulators worried it could hurt patients, insurers, and care providers. Now, the companies have inked a waiver agreement to extend the merger deadline to December 31, 2025, or 10 days after a final court decision, whichever comes first.
This isn't UnitedHealth's first rodeo with regulatory hurdlesremember their tussle with the DOJ over Change Healthcare in 2022? That deal eventually went through, so there's precedent for perseverance paying off. But with a new administration under President-elect Donald Trump and his antitrust chief nominee, Gail Slater, signaling a tough stance on big mergers, the road ahead could be rocky. Analysts are watching closely as UnitedHealth doubles down on its push to finalize the deal, even introducing a $325 million break fee if certain asset divestitures don't happen by May 1. The stakes are high, and investors know it.
The market response? Mixed, but telling. Amedisys shares soared 4.7% in premarket trading, landing at $89.99 as traders welcomed the deadline extension. UnitedHealth, on the other hand, slipped 0.23%a cautious dip that reflects lingering uncertainties. With the DOJ lawsuit heating up and the potential for regulatory shake-ups in the coming months, this is one healthcare saga that's far from over. For now, investors are left weighing the risks against the rewards of a deal that could reshape the industry.
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Name: UnitedHealth Group Incorporated
Current Stock Price: 508.4 USD
Market Cap: 467872382976 USD
Sector: Healthcare
Industry: Healthcare Plans
EPS: 15.39
Forward EPS: 29.9
P/E Ratio: 33.034435
Forward P/E: 17.009403
52 Week Low: 436.38
52 Week High: 630.73
50 Day Average: 567.3352
200 Day Average: 539.0373
Summary: UnitedHealth Group Incorporated operates as a diversified health care company in the United States. The company operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage, and health and well-being services to individuals age 50 and older addressing their needs; Medicaid plans, children's health insurance and health care programs; and health and dental benefits, and hospital and clinical services, as well as health care benefits products and services to state programs caring for the economically disadvantaged, medically underserved, and those without the benefit of employer-funded health care coverage. The Optum Health segment provides care delivery, care management, wellness and consumer engagement, and health financial services patients, consumers, care delivery systems, providers, employers, payers, and public-sector entities. The Optum Insight segment offers software and information products, advisory consulting arrangements, and managed services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies, and other organizations. The Optum Rx segment provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and community health pharmacy services, infusion, and purchasing and clinical capabilities, as well as develops programs in the areas of step therapy, formulary management, drug adherence, and disease/drug therapy management. UnitedHealth Group Incorporated was founded in 1974 and is based in Minnetonka, Minnesota.
Analyst Recommendation: strong_buy
Number Of Analyst Opinions: 26
Total Cash: 37134000128
Free Cash flow: -2398249984
Operating Cash flow: 16641999872
EBITDA: 35035000832
Revenue Growth: 0.092
2024-09-30 ... 2023-06-30
Tax Effect Of Unusual Items 288894000.0 ... NaN
Tax Rate For Calcs 0.178 ... NaN
Normalized EBITDA 8106000000.0 ... NaN
Total Unusual Items 1623000000.0 ... NaN
Total Unusual Items Excluding Goodwill 1623000000.0 ... NaN
Net Income From Continuing Operation Net Minori... 6055000000.0 ... NaN
Reconciled Depreciation 1041000000.0 ... NaN
Reconciled Cost Of Revenue 77791000000.0 ... NaN
EBITDA 9729000000.0 ... NaN
EBIT 8688000000.0 ... NaN
Net Interest Income -1074000000.0 ... NaN
Interest Expense 1074000000.0 ... NaN
Normalized Income 4720894000.0 ... NaN
Net Income From Continuing And Discontinued Ope... 6055000000.0 ... NaN
Total Expenses 92112000000.0 ... NaN
Total Operating Income As Reported 8708000000.0 ... NaN
Diluted Average Shares 930000000.0 ... NaN
Basic Average Shares 923000000.0 ... NaN
Diluted EPS 6.51 ... NaN
Basic EPS 6.56 ... NaN
Diluted NI Availto Com Stockholders 6055000000.0 ... NaN
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