Merge Healthcare just released its competitive bid to buy Amicas for $248 million—upping a previous offer by an affiliate of Thoma Bravo, LLC for the Boston-based health IT and PACS vendor. On the news, the Amicas stock price jumped up about 9 percent this morning to $5.83. The unsolicited bid was not welcomed by the Amicas Board of Directors, who this morning called the Merge proposal “illusory and risky to Amicas stockholders.” The board thus is continuing to unanimously recommend that Amicas stockholders vote in favor of the Thoma Bravo merger.
The Amicas board and management team said they have “actively engaged with Merge and its advisors in an attempt to negotiate a transaction that is in the best interest of Amicas stockholders.” But after careful review of this offer from Merge, it “determined that the Merge proposal is not a Superior Proposal” as it fails “to provide sufficient financial guarantees and reasonable protections for Amicas stockholders.”
The $6.05 cash per share represents a 13 percent premium to the previously announced offer for Amicas from a newly-formed affiliate of Thoma Bravo, LLC. Merge today said its current offer follows its offer of $6.00 cash per share that was made during the “go-shop” period contemplated by Amicas’ merger agreement with Thoma Bravo. Last week, Merge intervened in Massachusetts litigation that challenges the adequacy of Amicas’ disclosures relating to this transaction, as well as the process by which its proposals have been considered by the Amicas’ Board of Directors.
In late December, Amicas announced it signed a definitive merger agreement with Chicago-based Thoma Bravo in a transaction valued at approximately $217 million. At that time, the Amicas board of directors had unanimously approved the agreement and resolved to recommend that the shareholders adopt the agreement. Under the terms of that agreement, Amicas said its shareholders would receive $5.35 in cash for each share of Amicas common stock they hold, representing a premium of approximately 24 percent more than Amicas' average closing share price during the 30 trading days ending Dec. 24, 2009, and a 38 percent premium more than Amicas' average closing share price during the 90 trading days ending Dec. 24, 2009.
Amicas today said they are “confident that the Thoma Bravo merger can be completed in a timely manner [it was due to close Feb. 19 th] immediately following stockholder approval at the Special Meeting of Amicas Stockholders scheduled to be reconvened on March 4, 2010. The company added that is “has been advised that Thoma Bravo currently remains fully committed to the transaction.”
Merge said it has a signed bridge financing commitment from Morgan Stanley to provide $200 million of debt financing, and is subject only to standard and customary conditions. Based on that commitment and available cash, including $40 million of pre-funded equity investments from mezzanine investors, Merge said it has proposed to commence a $6.05 cash per share tender offer for all AMICAS shares and to close the acquisition as quickly as possible thereafter.
Amicas said it had notified the SEC of the unsolicited bid from Merge.
Health Imaging News will continue to monitor this story. More details, specifically why the Amicas board objects to the Merge deal, are available here.