Bon Secours affiliate sweetens bid for Surgery Partners to up to $6 billion

Nov 9 (Reuters) - HealthSpan Partners, an affiliate of nonprofit hospital system Bon Secours Mercy Health, sweetened its bid for Surgery Partners to up to $6 billion on Monday, after the receipt of an unsolicited competing proposal from a third party.

Shares of Surgery Partners climbed 12% in morning trading.

Private equity group Bain Capital, which has been a minority shareholder since 2017 and owns 39% of Surgery Partners, will back the deal, the companies said.

Under the terms, Surgery Partners shareholders, excluding Bain Capital affiliates, would receive $25 per share in cash, up from the prior offer of $23.50 per share.

If shareholders approve the merger but it closes after March 1, 2027, eligible shareholders would receive additional monthly payments, the companies said.

If the deal closes on the final outside date of October 23, 2027, these payments could add up to $1.61 per share, increasing the total potential consideration to $26.61 per share.

"This transaction provides exceptional value for our stockholders, along with regulatory certainty and a closing expected in the near term," Surgery Partners CEO Eric Evans said.

Surgery Partners agreed to revise its deal with HealthSpan after considering an unsolicited, non-binding offer from another buyer on November 3 to purchase all of its shares for $28 per share in cash.

The company’s independent special committee said the third party’s higher proposal posed greater regulatory and closing risks, which could take longer or fail to close, and lacked protections offered under HealthSpan’s revised deal.

The amended deal is expected to close in the first quarter of 2027.

The addition of Surgery Partners will expand Bon Secours Mercy Health’s US footprint well beyond its more than 45 hospitals, according to the hospital system, adding over 200 sites across 30 states and about 5,000 affiliated physicians.