UnitedHealth Group’s Optum unit has submitted an unsolicited all-cash bid of almost $3.3 billion for Amedisys, which last month agreed to be bought by Option Care Health in an all-stock deal.
The $100 per-share bid represents a 26% premium over Amedisys’ closing price Friday of $86.25 per share.
Option Care Health’s all-stock offer valued Amedisys at $97.38 per share. Under the terms of that proposal, Amedisys stockholders would receive 3.0213 shares of Option Care Health’s common stock for each share of Amedisys common stock.
In a news release, Amedisys said its board is engaging in discussions with Eden Prairie, Minnesota-based Optum and believes its offer could be “superior” to the deal it cut with Option Care Health. The board determined the bid was reasonable on May 27.
Optum Care Solutions CEO Dr. Patrick Conway said in the news release that a merger with Amedisys could “drive meaningful health outcomes and experiences of more patients at lower costs, leading to continued growth.”
Calls to Baton Route, Louisiana-based Amedisys and Option Care were not immediately returned. A spokesperson for Optum Care declined to comment beyond the news release.
The addition of Amedisys would help UnitedHealth become a home health powerhouse.
Amedisys is the nation’s second-largest home health provider with 522 care centers in 37 states. It also offers hospice services and hospital-at-home under its Contessa unit. Optum Care is UnitedHealth Group’s technology-enabled health services business.
An Optum-Amedisys marriage could raise antitrust concerns. In February, Optum closed on its $5.4 billion acquisition of LHC Group, another large home health and hospice firm operating 964 locations in 37 states. That deal took months to complete after the Federal Trade Commission sought additional information.
Analysts said Amedisys shareholders will need to weigh the risk of FTC scrutiny of a deal with Optum, but they said it could get approved due to the home health market’s fragmentation.
“Once investors get past the FTC risk associated with UNH’s bid, its all-cash nature and valuation that puts it above the nominal valuation of the OPCH offer at the time of that announcement, making UNH’s offer compelling, although deal completion will likely take time ,” Brian Tranquilut, a Jeffries Equity analyst, wrote in a research note.
Option Care Health, based in Bannockburn, Illinois, responded quickly to Optum’s Amedisys offer early Monday, reiterating its belief in the near-term and long-term advantages of its deal with Amedisys.
“Option Care Health’s previously announced definitive merger agreement with Amedisys delivers significant value to Amedisys and Option Care Health stockholders, a high degree of certainty in obtaining the required regulatory approvals due to the complementary nature of the parties’ businesses, and benefits patients, providers, payers, and care teams,” the company said in a statement.
The pursuit of Amedisys by both companies is part of a growing trend in healthcare driven by growth in Medicare Advantage and value-based care. Health insurers are creating vertically integrated holistic healthcare businesses in an effort to control costs by keeping patients healthier at home and out of hospitals.
Humana purchased the remaining 60% interest in Kindred at Home for $8.1 billion in 2021 and folded it into its CenterWell brand last year. In March, CVS Health closed on its $8 billion purchase of Signify Health, a technology and services company that is also in the home health space.
