Team Health rejects AmSurg merger deal

TeamHealth is nearing the completion of its $1.6 billion acquisition of IPC Healthcare, a national acute hospitalist and post-acute provider organization. AmSurg's previous offer was made in September.

"This is the same proposal that [our] board of directors previously reviewed, considered and rejected as not in the best interest of TeamHealth and its stockholders", the company said in a statement.

Team Health Holdings (NYSE:TMH) last announced its earnings results on Tuesday, August 4th. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $1.71 per share. The company reported $0.70 EPS for the quarter, topping the consensus estimate of $0.69 by $0.01.

"The Team Health board reaffirmed its conclusion to reject AmSurg's proposal as it undervalues the company and contains significant execution risk", Team Health President and CEO Michael Snow said in a statement.

Stifel Nicolaus reiterated their Buy stance on September 28, and increased their price target on TMH stock from $68 to $71. Its market capitalization was $13.54 billion. Jefferies fixed their price target at $80.

Is this a Buying Opportunity? . Barclays maintains its view on Team Health Holdings, Inc. Two equities research analysts have rated the stock with a hold rating and eleven have issued a buy rating to the stock. During last trade its minimum price was $15.36 and it gained the highest price of $15.95. The firm is ahead its 52-week low of 23.38% and going down from its 52-week high price of -0.74%.

Reacting to the latest development, Team Health shares jumped about 22% to $64 during early market trading. The 1-year stock price history is in the range of $48.99 - $70.21. The Company also provides programs for hospital medicine (hospitalist), anesthesiology, pediatrics and other healthcare services, by providing permanent staffing, that enables the management teams of hospitals and other healthcare facilities to outsource certain management, recruiting, hiring, payroll, billing and collection and benefits functions. TMH stock price has underperformed the S&P 500 by 9.1%.

AmSurg highlighted its successful integration of its May 2014 purchase of Sheridan Healthcare, a deal that came with a price tag of $2.35 billion. The 50-Day Moving Average price is $56.52 and the 200 Day Moving Average price is recorded at $60.67. The business's quarterly revenue was up 30.0% compared to the same quarter last year. Around 5% of the company's shares, which are float, are short sold. Its total trading volume for the day was 5.02 million shares, versus its average volume of 4.77 million shares.

 

The company is expected to announce next quarter earnings on November 3, at consensus estimate of $0.71.