It was disclosed that R1 RCM (NASDAQ:RCM) granted a waiver request extension to large shareholders TCP-ASC and New Mountain, which are evaluating a takeover of the company. The waiver request extension, now valid through July 12, 2024, allows the two parties to continue to discuss a joint takeover transaction.
Analysts view the news as positive for a company takeover, suggesting a formal bid is forthcoming.
"We think TCP-ASC and NMC have yet to submit a bid to RCM's Special Committee and may just need another month to finish their joint proposal," analysts at TD Cowen commented.
The analysts highlighted that shortly after TCP-ASC and NMC were granted a waiver to form a group, Ascension became aware of a ransomware attack that impacted many of its locations. "We think the recent Ascension cyberattack could have diverted attention over recent weeks and limited the time to prepare a formal bid," they commented.
"We believe the request for a waiver extension indicates a formal bid will eventually be made and greatly increases the chance of a transaction taking place," analysts added. "A joint transaction with both TCP-ASC and NMC would represent 60%+ of RCM shareholders. We continue to believe that any deal would have to be agreed upon by a majority of the minority shareholders (i.e. the 38% of RCM voting rights that is not owned by TCP-ASC or NMC) and that minority shareholders would likely require a price well north of $13.75 (11x our 2025E adj EBITDA)."