Dive Brief:
- Athenahealth has postponed the deadline for bids to acquire the company until Sept. 26 to allow more time for a potential buyer to prepare its bid.
- A source close to the matter said the late comer is considered a strategic buyer, possibly a competitor or supplier, and joins other parties interested in the cloud-based health IT vendor.
- At the same time, Elliott Management, which sent athenahealth an unsolicited offer of $160 a share — or a $6.9 billion — in early May, plans to submit a bid by the new deadline. The New York Post had reported Monday that the fund manager may be backing off its earlier offer.
Dive Insight:
In a May financial filing, athenahealth's largest shareholder, Janus Henderson Group, revealed it had urged the company to put itself up for sale. The filing noted concerns over athenahealth's management and execution of strategic initiatives.
Elliott Management's unsolicited bid received the silent treatment, prompting a terse letter to athenahealth's board of directors complaining of the company's "lack of communication."
The following month, after allegations of domestic abuse forced President and CEO Jonathan Bush to step down, athenahealth said it would explore strategic alternatives.
As Wall Street tried to read the tea leaves on athenahealth's latest move, Jefferies' analysts speculated that Elliot got cold feet after tepid bookings numbers in the first two quarters of the year and also seeing the exit of Bush boosting attrition.
"Given the recent bookings performance ... higher ambulatory attrition levels, continued struggles in inpatient and departure of founder Jonathan Bush, there's little reason to expect revenue growth stabilizes over the coming year(s)," the analysts wrote in an investor note.
Athenahealth did not respond to a request for comment. Elliott Management officials were not available to discuss the matter.
The source told Healthcare Dive that Elliott Management's initial bid was based on public filings. It's possible the investment manager will revise that bid now that potential buyers have access to all of athenahealth's financial and company records.
