The takeover battle for Surgery Partners is far from settled. HealthSpan Partners raised its offer to $25 per share, but analysts at RBC Capital Markets believe a rival bidder—reportedly linked to UnitedHealth Group—could return with an even higher price.
In a note released Monday, RBC said it “would also not be surprised” if the third party that made an unsolicited $28-per-share approach earlier this month came back with an improved proposal. That approach, which Bloomberg reported was tied to UnitedHealth, one of the largest U.S. health insurers, was turned down by Surgery Partners.
What’s happening with the bids?
HealthSpan Partners, a private equity firm focused on healthcare, initially made a bid for Surgery Partners, a major operator of ambulatory surgery centers. After the $28-per-share approach surfaced in November, HealthSpan raised its offer to $25 per share. That bump appears to be a direct response to the competing interest.
The $28-per-share figure is significantly higher than HealthSpan’s current offer, suggesting that the board of Surgery Partners might hold out for a better deal. RBC’s note highlights the possibility that the UnitedHealth-linked bidder could sweeten its proposal, which would put pressure on HealthSpan to match or exceed it.
For context, Surgery Partners operates a network of surgical facilities across the U.S., providing outpatient procedures. The company has been a target for acquirers looking to consolidate the growing ambulatory surgery center market, which is seen as a lower-cost alternative to hospital-based procedures.
Why this matters for investors
For shareholders of Surgery Partners, the ongoing bidding war is a positive sign. When multiple parties compete for a company, it often drives the final acquisition price higher. The gap between HealthSpan’s $25 offer and the reported $28 approach gives investors reason to believe the stock could be worth more than the current bid.
However, there’s no guarantee that the UnitedHealth-linked bidder will return with a higher offer. RBC’s note is speculative, based on the pattern of such situations. In many takeover battles, the initial bidder often raises its offer to fend off competition, but sometimes the rival walks away.
Investors should also consider the regulatory landscape. Any deal involving a major health insurer like UnitedHealth would likely face antitrust scrutiny. That could delay or complicate a transaction, even if a higher bid emerges.
What to watch next
The key question is whether the $28-per-share bidder will make a formal offer. If it does, Surgery Partners’ board would have to weigh the higher price against any regulatory risks. If it doesn’t, HealthSpan’s $25 offer might be the best deal on the table.
RBC’s note suggests that the market should not assume the bidding war is over. The fact that a third party made an unsolicited approach at a price well above HealthSpan’s initial offer indicates strong interest in Surgery Partners’ assets.
For everyday investors, this story is a reminder that M&A activity can create volatility and opportunity. Stocks of target companies often trade below the announced bid price, reflecting uncertainty about whether the deal will close. In this case, the gap between the current offer and the reported higher bid adds another layer of speculation.
As the situation develops, investors will be watching for any announcements from Surgery Partners, HealthSpan, or the potential third-party bidder. A formal offer at $28 or higher would likely send the stock up, while a withdrawal by the rival could push it down toward HealthSpan’s bid level.
In the meantime, the broader market context is also relevant. Healthcare M&A has been active, with companies seeking to expand in outpatient services. This deal could set a precedent for valuations in the sector.
For now, the message from RBC is clear: don’t count out a higher bid. The takeover story of Surgery Partners is still being written, and the final chapter may include a higher price tag.
