AthenaHealth, Inc. | $ATHN Stock | Shares Surge After Elliot Management Agrees to Acquire Firm for $7B

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AthenaHealth, Inc. (NASDAQ: ATHN)


Medical billing software maker AthenaHealth, Inc. has entered into a $7 billion acquisition deal with Elliot Management Corp. According to CNBC which first published the news on Monday morning, Elliott has proposed a price of between $155 to $160 per share. The price represents a premium of between 23% to 27% to the ATHN $126.08 closing price on Friday.

The deal includes equity from partners and is fully financed. Following news of the proposal, shares of AthenaHealth surged more than 24% before the bell on Monday. At the time of writing this article, the shares were exchanging hands $154.00 after gaining $27.92, or 22.14%.

AthenaHealth Stock Chart

Elliott Management wants to take them private for $7 billion after growing frustrated with the performance of the company. Elliott, an activist hedge fund based in New York City says it has a stake of 9% stake in AthenaHealth, and the firm is yet to make the changes it needs to create value and grow as a public company. Last year, they said it would cut 9% of its employees – or about 500 jobs – as part of a cost cutting plan approximated at $100 million.

In the takeover bid letter, Elliott announced it is aiming for greater change. “It is clear to us and becoming clear to many others that AthenaHealth’s potential will never be realized without the kind of operational change that the company seems unable to deliver. We are faced now with the stark reality that AthenaHealth as a public-company investment, despite all of its promise, has not worked for many years, is not working today and will not work in the future.”

“Given AthenaHealth’s potential, this reality is deeply frustrating, but the fact remains that AthenaHealth as a public company has not made the changes necessary to enable it to grow as it should and to create the kind of value its shareholders deserve,” the letter said.

Elliott also said that it had approached the management of AthenaHealth last year in November seeking to take to acquire it, but the latter “refused to engage.” They could not be reached to comment on the news immediately.

About AthenaHealth, Inc.

AthenaHealth engages in the provision of digital health care services. The company is under the management of former president George W. Bush’s cousin, Jonathan Bush. The company has a work force of about 5,282 employees connecting more than 106,000 health systems and providers countrywide. The headquarters are located in Watertown, Massachusetts. The company came into existence in 1997.

About Elliott Management Corp.

Elliott Management Corp. is a hedge fund firm located in New York City. It also has affiliates offices elsewhere in the US, Tokyo, London, and Hong Kong. The firm has a total of 440 employees, and as of January 1, 2018 it had more than $34B worth of assets under its management. Elliott was founded in 1977 and is led by Paul Singer.