Surgery Partners Raises Consideration to $25 a Share After Rival Bid at $28
Key Facts
Surgery Partners and HealthSpan Partners amended their merger agreement, raising the cash consideration to $25 a share after the company received a non-binding offer from a third party to buy all of its outstanding shares for $28 a share in cash. The companies said the rival offer arrived on November 3, 2026, and was updated on November 8. The amendment changes the terms of the existing deal for shareholders while keeping in place the agreed acquisition path with HealthSpan. The revised consideration includes additional fees if closing passes a specified date, tying the final value per share to the timing of the transaction. The board’s special committee concluded that the updated rival offer did not qualify as a superior proposal under the merger agreement.
The amendment provides for $25 in cash per share if the deal closes before March 1, 2027. If closing is delayed beyond that date, shareholders become entitled to equal monthly fees paid retroactively, totaling up to $1.61 a share if the deal closes on October 23, 2027. The maximum consideration would therefore reach $26.61 a share if the fee conditions are met and the deal closes on that date. The fees accrue at an annual rate of 10% on the $25-per-share consideration. The updated rival offer proposes $28 in cash per share, according to the companies’ statement; however, the special committee did not deem it a superior proposal under the agreement.
The company said the special committee and board considered the possibility that the rival offer could take much longer to complete or might not close at all. Other considerations included regulatory complexities related to the offer and a lack of required contractual assurances, according to the company’s statement. These timing and regulatory risks were among the grounds on which the committee assessed the updated offer. The committee unanimously concluded that it did not constitute a “superior proposal” under the merger agreement. On that basis, it recommended amending the HealthSpan agreement, while the board reaffirmed its recommendation that shareholders approve the amended deal.
The original deal dates to an agreement announced on October 26, 2026, which provided for $23.50 in cash per share for shareholders, excluding Bain Capital affiliates. At the time, the company valued the transaction’s enterprise value at about $5.7 billion. The amendment raises the base consideration to $25 a share, with conditional ticking fees if closing extends beyond the specified date. The deal aims to add Surgery Partners to the HealthSpan platform, bringing more than 200 locations in 30 states and about 5,000 affiliated physicians. The expansion would bring the company’s network of facilities and physicians into the combined platform upon completion of the deal.
The original deal was expected to close in the first quarter of 2027, subject to shareholder approval, regulatory approvals and customary closing conditions. That was the completion timeline announced with the original agreement, while additional fees begin accruing on March 1, 2027, if closing has not occurred by then. The final closing date specified in the fee mechanism is October 23, 2027, when total fees reach a maximum of $1.61 a share. In the latest market data cited, Surgery Partners shares closed at $23.2 on November 6, 2026. That price predates the November 9 announcement of the agreement amendment and does not reflect the market’s reaction to the news after its release.