RCM shares surged sharply after an amended filing issued on Friday revealed that TCP-ASC is finalizing a proposal to acquire all outstanding common stock shares of R1 RCM (NASDAQ:RCM) that are not currently owned by the partnership.
The new proposal offers a higher price than the one described in the standstill waiver request on July 1, which suggested a purchase price of $13.25 per share in cash from New Mountain Capital (NMC), down from a previous proposal of $13.75.
RCM stock jumped more than 13% in premarket trading Monday.
“We think TCP's willingness to acquire RCM at a price higher than $13.25 is likely related to TCP needing to deliver a fair price to its existing LPs,” analysts at TD Cowen said.
“At the same time, TCP likely needs to balance this against offering a fair and attractive enough entry point for their new LPs. To the extent that some of the new investors are the same as from the previous fund, there may be less sensitivity around price,” they added.
Where this leaves NMC remains to be seen, analysts commented, though they believe the private equity firm will likely sell its shares to RCM.
The filing also indicates that Joseph Flanagan, a Board of Directors member and former CEO of RCM, is in talks to potentially serve in a senior executive role post-acquisition.
Meanwhile, Flanagan plans to assist RCM with due diligence on the issuer. No definitive agreement with Flanagan regarding the transaction has been reached.
In its note covering the news, Bank of America said RCM shares “continue to not trade on fundamentals.”