American Medical Says 2 More Bidders May Be in the Wings
American Medical International, already the subject of a $1.67-billion acquisition bid from a private investor group, disclosed Wednesday that two other parties may make offers to buy the company.
The Beverly Hills-based hospital management firm refused to identify the potential suitors and said it had not yet decided whether to make offers that would top IMA Acquisition Corp.’s bid. That investor group includes Chicago’s Pritzker family and First Boston Corp.
AMI, in a filing with the Securities and Exchange Commission, said it would encourage the parties to make bids by sharing information on the company’s financial performance and, if necessary, through negotiations.
The statement was released just two days after the company announced an agreement on a revised buyout proposal from IMA Acquisition. IMA, which had offered $1.9 billion for the company on July 6, said last Thursday that it could not arrange financing for its original offer and proposed to lower it by $230 million. On Monday, AMI said it won the right to seek competing offers in exchange for allowing IMA to reduce its bid.
IMA, which has extended its offer four times, has now set a deadline of Oct. 25 for stockholders to tender their shares in the deal. Under the revised agreement, IMA is offering $23 a share in cash plus new AMI stock that analysts value at $1.50 to $2 per share.
AMI shares closed Wednesday on the New York Stock Exchange at $24, up 25 cents in heavy trading, reflecting speculation over the possibility of a new round of bidding for the company.
AMI said the two prospective suitors had made competing buyout bids in July, which were rejected in favor of IMA’s offer. AMI never identified all the suitors in July, but two of them were Brian M. Freeman Enterprises--a Roseland, N.J.-based labor consultant--and an investment group led by the New York takeover specialist Clayton & Dubilier.
Many analysts speculated that Clayton & Dubilier is one of the two parties discussing a new bid. In July, Clayton & Dubilier--teaming with the Los Angeles-based Shamrock Investments Acquisition Group and former AMI director M. Lee Pearce--offered $27 a share, $23 of it cash.
Clayton & Dubilier may be acting alone or may propose a deal that would include Shamrock, said Rae Alperstein, a securities analyst at Bateman Eichler, Hill Richards in Los Angeles. Charles Reilly, the managing partner of Shamrock, was a vice president at AMI until 1986.
“Clayton & Dubilier is the most obvious contender at this time,” Alperstein said. “Shamrock has the management capability and Clayton & Dubilier has the financial muscle.”
Another analyst, Margot Vignola of Salomon Bros. in New York, said Healthtrust Inc., a hospital chain based in Nashville, Tenn., may have expressed interest in AMI. She also said some of the billionaire Bass brothers of Texas may be interested. RTF Partners, a Ft. Worth firm owned by the Basses, already holds a 12% stake in AMI.
Some analysts, however, do not expect to see an new offer.
“A bid is highly unlikely,” said Todd Richter, an analyst at Dean Witter Reynolds. “The parties probably want to look at the (financial) books before the deal is done. Everyone else is at a disadvantage because IMA has its financing arranged.”
In another SEC filing Wednesday, IMA revealed its financial arrangements for its bid. First Boston, which was to finance the original bid with $712 million in junk bonds, will now use about $578 million in high-yield notes for the acquisition.
