By Mackenzie Tatananni

Amedisys stock climbed Friday after the provider of home health care agreed to waive its right to terminate a merger agreement with UnitedHealth Group, bolstering expectations that the deal will succeed despite a government attempt to block it.

Shares of Amedisys were up 4.7% to $89.97, marking a fifth consecutive days of gains.

Amedisys agreed to be acquired for $3.3 billion, or $101 a share in cash, in June 2023, but the Justice Department filed a civil antitrust lawsuit last month, saying the proposal would eliminate competition in the hospice industry. The companies have been two of the largest home health providers in the U.S. since UnitedHealth acquired LHC Group in 2023, the department said.

Amedisys said in a securities filing on Friday that it and UnitedHealth would extend the deadline for the merger until the U.S. District Court for the District of Maryland rules on the lawsuit, or until the end of 2025, whichever comes first.

TD Cowen analysts led by Ryan Langston wrote that Friday's announcement was a positive development for Amedisys.

"Given the new timeframe the waiver also provides UNH the ability to engage with the DOJ under the new administration for a potential remedy, " the analysts said. "We believe today's announcement also implies reasonable confidence by UNH they will find a resolution and complete the merger."

The analysts rate Amedisys at Hold, with a target of $85.95 for the price.

UnitedHealth Group was down 0.4% at $508.98 on Friday, leaving the shares down about 3% so far this year. Shares tumbled nearly 10% in the aftermath of the Dec. 4 killing of UnitedHealthcare CEO Brian Thompson.

The stock price is among the highest of companies in the Dow Jones Industrial Average, which is weighted according to price, so UnitedHealth's struggles have dragged down the index.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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December 27, 2024 12:58 ET (17:58 GMT)

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