WHEN: Today, Monday, May 7, 2018
WHERE: CNBC's "Squawk on the Street"
Following is the unofficial transcript of breaking news from CNBC's David Faber on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Monday, May 7th, in regards to Elliott Management's all cash bid for AthenaHealth. Following is a link to the video on CNBC.com: https://www.cnbc.com/video/2018/05/07/elliott-to-make-all-cash-offer-for-athenahealth-say-sources.html?play=1.
All references must be sourced to CNBC.
DAVID FABER: WELCOME BACK. SOME BREAKING NEWS TO SHARE WITH YOU THIS MORNING, M&A RELATED. ATHENAHEALTH IS THE SUBJECT OF A BID FROM ITS 9.2% SHAREHOLDER, ELLIOTT MANAGEMENT, ACCORDING TO PEOPLE FAMILIAR WITH THE SITUATION. ELLIOTT IN RECENT WEEKS HAS BEEN PUTTING TOGETHER THE FINANCING FOR A BID THAT I'M TOLD WILL BE BETWEEN $155 AND $160 A SHARE, ALL CASH. THEY'VE ALSO BEEN RAISING EQUITY FROM PARTNERS, GIVEN AN EQUITY CHECK FOR A DEAL OF THIS SIZE, LET'S CALL IT ROUGHLY $7 BILLION IN TOTAL, INCLUDING ATHENA'S DEBT, WHICH IS NOT THAT LARGE. THEY ARE RAISING SOME EQUITY FROM ADDITIONAL PARTNERS, BUT AGAIN, ELLIOTT, ACCORDING TO PEOPLE FAMILIAR WITH THE SITUATION, IS MOUNTING AN ALL CASH OFFER TO BUY ATHENA HEALTH BETWEEN $155 AND $160 A SHARE. IT WAS A YEAR AGO THAT ELLIOTT ACTUALLY TOOK A 9.2% POSITION. WE GOT A 13 DEFILING, BUT NOT MUCH ELSE. IN THAT TIME I'M TOLD, AGAIN, BY PEOPLE FAMILIAR WITH THE CONVERSATIONS BETWEEN THE TWO COMPANIES, THERE HAS BEEN DIALOGUE BUT THERE'S BEEN SOME FRUSTRATION ON THE PART OF ELLIOTT THAT ATHENA HAS NOT DONE MORE TO SORT OF FIX WHAT ELLIOTT CLAIMS ARE EXECUTION ISSUES FOR ITS KEY PRODUCT. A PRODUCT THAT IS IN MANY WAYS IS FAR AHEAD OF SOME OF ITS COMPETITORS BEING IT IS CLOUD-BASED. A PROVIDER OF ALL SORTS OF DIFFERENT SERVICES TO MEDICAL PRACTITIONERS, WHETHER THEY BE HOSPITALS OR MEDICAL PRACTICES, TO SORT OF HELP THEM WITH ALL OF THEIR INFORMATION NEEDS. BUT THE QUESTIONS ON THE PART OF ELLIOTT IN TERMS OF EXECUTION – BUT ELLIOTT NOW WANTS TO OWN THE ENTIRE COMPANY. AND AGAIN, HAS – IS GOING TO – OR HAS BID BETWEEN $155 AND $160. UNCLEAR TO ME, WHETHER AGAIN, WHILE THEY'VE BEEN WORKING ON THIS, IT'S BEEN FULLY RECEIVED BY – BY ATHENA AT THIS POINT. JONATHAN BUSH, NO STRANGER TO OUR AIR OF COURSE, THE CEO OF THE COMPANY WHO COMES ON FREQUENTLY, OUTSPOKEN GENTLEMAN HE IS, AS WELL, HE ADDED A CHAIRMAN NOT THAT LONG AGO, BACK ON FEBRUARY 7th THAT WE ALSO KNOW WELL, ONE JEFF IMMELT IS CHAIRMAN OF ATHENA. IN PART THAT WAS DONE TO POTENTIALLY STEM SOME OF THE CRITICISM HE'D BEEN RECEIVING FROM ELLIOT IN TERMS OF SORT OF PUTTING IN PLACE A MANAGEMENT TEAM THAT THEY FELT WAS APPROPRIATE FOR THE OPPORTUNITY SET THAT IS THERE. BUT ELLIOTT NO STRANGER, GUYS, TO ACTUALLY MAKING BIDS. YOU KNOW, WE KNOW THEM AS A LARGE ACTIVIST FUND WITH A LOT OF DIFFERENT DISCIPLINES WITHIN THAT. BUT THEY DO BUY THINGS. GIGAMON IS A COMPANY THEY BOUGHT NOT THAT LONG AGO. THEY ALSO WERE THERE AT THE END I THINK FOR LIFELOCK WHICH WAS BOUGHT BY PRIVATE EQUITY. AND SO HERE IS ANOTHER SITUATION WHERE THEY AGAIN ARE WILLING TO PUT UP A GOOD AMOUNT OF EQUITY CAPITAL, HAVE RAISED THE FINANCING AS WELL TO TRY TO ACQUIRE ATHENA. NO WORD OF COURSE FROM ATHENA AT THIS POINT. WE'LL CERTAINLY ALERT YOU WHEN WE HEAR FROM THEM.
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