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Option Care Health CEO John Rademacher said Wednesday the company is standing by its $3.6 billion all-stock bid to buy Amedisys, despite a competing bid for the home health firm from UnitedHealth Group’s Optum unit.
“Our belief is there is significant value to Amedisys shareholders and Option Care shareholders both on the strategic and financial merits of the combination and we continue to work towards that outcome and work to close an agreement that we have in place,” Rademacher said during the Jefferies Healthcare Conference in New York.
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On Monday, Optum submitted a $3.3 billion all-cash bid for Amedisys, a month after the Baton Rouge, Louisiana-based home health and hospice firm agreed to an all-stock deal with Option Care Health. Optum’s $100 per-share bid represented a 26% premium over Amedisys’ Friday closing price of $86.25 per share.
Amedisys said it was in discussions with Eden Prairie, Minnesota-based Optum and believed its offer could be “superior” to the deal it cut with Option Care Health.
Under Option Care Health’s offer, Amedisys shareholders would receive 3.0213 shares of Option Care common stock for each share of Amedisys common stock they hold at the close of the transaction. That is equivalent to $97.38 per Amedisys share, based on Option Care Health’s May 2 closing share price.
Rademacher told investors at the conference he wasn’t surprised “someone else thinks Amedisys is a great asset,” but added that he thought a marriage between Option Care Health and Amedisys would create more long-term value.
As the nation’s second-largest home health firm, Amedisys is an attractive acquisition target. The company has 522 locations in 37 states. It also provides hospice services and hospital-at-home under its Contessa unit.
Option Care Health is the nation’s largest independent provider, by revenue, of home infusion and alternate site infusion services. A merger with Amedisys would enhance the company’s business and provide payer’s with one-stop shopping for home health and infusion services.
Rademacher told the Jefferies investor audience an Option Care Health-Amedisys deal would create something “unique and different.”
As more healthcare moves into the home, home health firms have become especially attractive acquisition targets among insurers who are trying to become more vertically integrated healthcare companies.
UnitedHealth Group Optum already owns LHC Group which has 964 locations in 37 states. Adding Amedisys would create a bigger home health footprint that could come under regulatory scrutiny. However, analysts think the deal could still get the green light given fragmentation in the home health market.
Louisville, Kentucky-based Humana purchased the remaining 60% share of Kindred at Home last year for $8.1 billion and rebranded the division as CenterWell. In March, CVS Health closed on Signify Health, a technology platform that offers home health, for $8 billion.
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