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Paul Singer’s Activist Hedge Fund Is Going After Athenahealth With a $6.5 Billion Bid

Key Speakers At The SALT ConferenceKey Speakers At The SALT Conference
Paul Singer, founder and president of Elliott Management Corp.Photograph by Bloomberg via Getty Images

Paul Singer’s activist hedge fund Elliott Management has its sights set on a new target: Athenahealth, the medical software, health IT, and data analytics firm run by CEO Jonathan Bush, an outspoken evangelist of the digital health revolution. Elliott took a 9.2% stake in Athenahealth last year and is now making a $160-per-share, $6.5 billion all-cash offer to snap up the company outright, CNBC reports.

That’s a premium of nearly 30% to Athenahealth’s closing price on Friday (and Athena shares promptly jumped 16% in Monday trading following reports of the deal). The question now is whether or not Bush and his board of directors are game for the M&A.

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Elliott, for its part, wasn’t exactly gentle in explaining a rationale for the deal: “It is clear to us and becoming clear to many others that Athenahealth’s potential will never be realized without the kind of operational change that the company seems unable to deliver,” wrote the firm in a letter announcing the offer, adding that Elliott and others had approached Athenahealth last year but been rebuffed.

It’s unclear what path Athenahealth will take (the company issued a boilerplate missive about reviewing the unsolicited proposal on Monday). One key factor, other than Bush, may be the company’s recently-appointed, high-profile chairman: former GE CEO Jeff Immelt.