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Elliott Management Offers Nearly $7B to Acquire athenahealth

Elliott Management Offers Nearly $7B to Acquire athenahealth

"For the past year, we have had extensive private engagement with athenahealth's management and the Board of Directors regarding the best path forward for the Company", wrote Elliott Management Partner and Senior Portfolio Manager Jesse Cohn in an open letter to the athenahealth board of directors. Elliott's bid is for $160 a share-a 27 percent premium to the Massachusetts-based healthcare technology company's Friday afternoon price.

According to CNBC, Elliott Management made an all-cash deal for Athenahealth on Monday morning. CEO Jeff Immelt joined as chairman this year, can not make the changes it needs while it remains a public company.

That's a premium of almost 30% to Athenahealth's closing price on Friday (and Athena shares promptly jumped 16% in Monday trading following reports of the deal). The shares were last up around 19 percent.

Athenahealth said in a statement that it had received an unsolicited proposal from Elliott and that the board will review it.

Athenahealth, Inc also says that its legal consul is coming from Weil, Gotshal & Manges LLP.

"Elliott's offer price was relatively low given the company's margins, cloud service model and growing revenue profile", as per the KeyBanc Capital Market Research note. 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. Athenahealth is led by CEO Jonathan Bush, the outspoken and controversial cousin of President George W. Bush and brother of Billy Bush. Elliott approached the company last fall about a take-private transaction involving Elliott or others and the company "refused to engage".

Elliott also said that it had approached the management of AthenaHealth a year ago in November seeking to take to acquire it, but the latter "refused to engage".

Elliott Management Corp.is a hedge fund firm located in New York City. Elliott Management also revealed the investor has amassed an 8.9 percent stake in the business.

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