Surgery Partners Inc. turned down a higher offer and took a better version of the one it already had. The Brentwood, Tenn., operator of outpatient surgery centers said on Monday that HealthSpan Partners, an affiliate of Cincinnati-based Bon Secours Mercy Health, raised its cash price to $25 a share from $23.50, valuing the company at an enterprise value of up to about $6 billion. Shares rose about 12% in morning trading.
The bump came after an unsolicited proposal that Surgery Partners received on Nov. 3 and that was revised on Nov. 8 to $28 a share in cash. The company didn’t name the bidder. UnitedHealth Group Inc. made the offer, according to a person familiar with the matter. UnitedHealth declined to comment.
Paying for time
A special committee of independent directors decided the $28 bid was not a superior proposal. It concluded that the offer would take much longer to close or might not close at all, faced more regulatory complexity and lacked the contractual protections the committee sought. UnitedHealth’s Optum unit already owns a large network of surgery centers, a footprint that would have drawn antitrust scrutiny.
To compensate holders for that tradeoff, the amended HealthSpan agreement adds a ticking fee. If shareholders approve the deal but it hasn’t closed by March 1, 2027, holders other than Bain Capital will receive monthly cash payments at a 10% annual rate on the $25 price, worth up to $1.61 a share, or $26.61 in total, if the deal closes on its Oct. 23, 2027, outside date.
Bain stays in
Bain Capital, which owns about 39% of Surgery Partners, remains bound by a voting agreement to support HealthSpan. It will roll its stake into the acquiring company rather than take cash and gets no ticking fee. HealthSpan still plans to fund the purchase with cash and new debt, with Jefferies providing committed financing. The companies expect to close in the first quarter of 2027. MERGER MONDAY covered the original HealthSpan agreement in October.
