Surgery Partners Raises HealthSpan Buyout to $25 a Share, Board Rejects $28 Rival Offer as Not Superior

Surgery Partners, Inc. (NASDAQ: SGRY) and HealthSpan Partners, the Bon Secours Mercy Health-affiliated acquirer pursuing the surgical facility operator, have amended their merger agreement to raise the cash price to $25.00 per share after Surgery Partners received an unsolicited competing proposal of $28.00 per share from a third party. Despite the higher outside offer, the Surgery Partners Board has reaffirmed its recommendation that stockholders approve the amended HealthSpan deal, after the company's Special Committee determined the rival bid did not qualify as a "Superior Proposal" under the existing merger agreement, according to a joint announcement filed with the SEC.

Amended Terms Raise Cash Consideration to $25, With Upside to $26.61

Under the amended agreement, the deal's headline cash consideration rises to $25.00 per share, representing an enterprise value of up to approximately $6.0 billion. Stockholders other than affiliates of Bain Capital stand to receive additional value if the deal takes longer to close: the amendment adds a monthly "Ticking Fee" of up to $1.61 per share, payable if the merger closes after March 1, 2027 and on or before the outside date of October 23, 2027, bringing maximum total consideration to $26.61 per share.

The Ticking Fee is structured as equal monthly installments paid in arrears at a rate equal to 10% per annum on the $25.00 per share merger consideration, according to the filing. Using those disclosed figures, Traders Agency calculates that 10% of $25.00 equals $2.50 per share per year, or roughly $0.2083 per share per month; applied across the approximately 7.7 months between March 1, 2027 and the October 23, 2027 outside date (7.7 × $0.2083), that works out to about $1.60 per share, consistent with the company's disclosed maximum add-on of $1.61 per share. The filing does not provide a day-by-day accrual schedule, so this is an approximation of the disclosed cap rather than a restatement of the contractual mechanics.

The $28 Rival Bid and Why the Board Rejected It as Not Superior

The competing proposal came from an unnamed third party, first submitted on an unsolicited, non-binding basis on November 3, 2026, and then updated on November 8, 2026, to offer $28.00 per share in cash for all outstanding Surgery Partners shares, according to the filing. That figure is $3.00 above the amended HealthSpan price on a per-share cash basis.

Even so, the Special Committee, after consulting financial and legal advisors, unanimously concluded the updated third-party proposal did not constitute a Superior Proposal under the terms of the HealthSpan merger agreement. The committee cited three reasons disclosed in the filing: the third-party proposal would likely take materially longer to close than the HealthSpan deal, or might not close at all, which the committee said reduces the real value of the higher headline price to stockholders; the proposal carried greater regulatory risk and complexity relative to the HealthSpan transaction; and it did not include the contractual and other protections the Special Committee was seeking to mitigate those risks. The filing does not detail the specific financing structure or closing conditions attached to the third-party proposal, and the Board's stated objections center on timing, regulatory exposure and the absence of deal protections rather than a published breakdown of the rival bid's funding sources.

Based on that recommendation, the Surgery Partners Board reaffirmed that it is urging stockholders to vote at the upcoming special meeting to approve the merger with HealthSpan Partners on the amended terms.

Bain Capital's Stake and Rollover Position

Bain Capital remains Surgery Partners' largest stockholder, with holdings of approximately 39% of outstanding shares. Bain previously signed a voting and support agreement committing it to vote its shares in favor of the HealthSpan merger, and that agreement remains in place under the amended terms. Notably, Bain Capital affiliates will not receive any merger consideration, including the Ticking Fee, for their shares. Instead, they will roll their equity into the acquiring entity and remain a significant partner alongside HealthSpan Partners after the deal closes, rather than cashing out at the $25.00 (or up to $26.61) per-share price offered to other holders.

Financing and Closing Timeline

HealthSpan Partners continues to intend to fully finance the acquisition through a combination of cash on hand and new debt, with commitments already secured, the companies said. Jefferies LLC has provided committed financing as sole initial underwriter and is also serving as HealthSpan Partners' exclusive financial advisor. On the Surgery Partners side, Centerview Partners is lead financial advisor, with Leerink Partners also advising the company, while Moelis & Company is advising the Special Committee.

The companies said the transaction is still expected to close in the first quarter of 2027, subject to Surgery Partners stockholder approval, regulatory approvals, and other customary closing conditions. The filing's risk disclosures explicitly flag the possibility that more competing offers could emerge and caution that there is no assurance the proposed transaction will ultimately be consummated.

Bottom Line

Surgery Partners has sweetened its agreed buyout with HealthSpan Partners to $25.00 per share, with a contingent path to $26.61, even as a competing bidder has offered $28.00 per share. The Board's decision to stay with the HealthSpan agreement reflects a judgment, as disclosed in the companies' own filing, that expected certainty of closing and contractual protections outweighed the higher headline price of the unsolicited proposal. Bain Capital's roughly 39% stake is committed through a voting and support agreement to back the HealthSpan transaction, a substantial bloc heading into the special meeting, though the requisite stockholder approval has not yet been obtained and the company has acknowledged that further competing offers remain possible before the deal is finalized.