LHC Group (NASDAQ:LHCG), which agreed to a $5.4 billion sale to UnitedHealth (UNH) in March, rose 1.1% after a judge denied the DOJ’s request to block UNH’s purchase of Change Healthcare (NASDAQ:CHNG).
LHCG moved in sympathy with Change Healthcare (CHNG), which climbed 6.4% on Tuesday, as investors may feel more confident that the the LHG (LHCG) deal wouldn’t face an antitrust challenge by regulators or even if they do, the buyer may prevail. The DOJ originally sued to block UnitedHealth’s (UNH) $8 billion planned purchase of Change (CHNG) in late February.
UnitedHealth (UNH) agreed to buy home health business LHC Group for $170/share in late March.
LHC (LHCG) and UNH disclosed in June that the companies received a second request from the Federal Trade Commission in regard to their combination. The FTC’s second request is said to be centered on workers’ pay in the home healthcare space, Dealreporter said in July.
“Our view has been that the challenge to the transaction was based on a somewhat ‘novel’ antitrust interpretation, which has created an overhang for other deals in the sector,” Credit Suisse analyst A.J. Rice wrote in a note on Monday in regard to the CHNG/UNH news. “With the transaction now set to proceed, this may be viewed positively for other M&A.”
Rice highlighted other deals that may benefit from the Chang Healthcare (CHNG) news include the LHCG/UNH deal, CVS’s (CVS) $8 billion planned purchase of Signify Health (NYSE:SGFY) and Amazon’s (AMZN) announced acquisition of One Medical (NASDAQ:ONEM) for $3.9 billion.
One Medical (ONEM) rose 1.1%, while Signify Health (SGFY) ticked up 0.5%.
Earlier this month Amazon (AMZN) disclosed that it received a FTC second request related to its purchase of One Medical (ONEM).