Sun Healthcare A Takeover Target?

January 10, 2008

January 10, 2008
No one is predicting any major M&A deals in the seniors housing and care sector, especially the buyout of a publicly traded company. But Sun Healthcare Group jumped by 6% yesterday on trading volume that was four times its daily average. The cause? Apparently, CNBC made a brief statement that Sun was "in play," or so we hear.

While it is probably the last in the field of skilled nursing companies that could be a target at some point (if we exclude the two that went public last year), we just don't see it happening right now and believe the value of the company will increase more after the full integration of the Harborside Healthcare acquisition. And this is not a sector play, either, as Skilled Healthcare Group and The Ensign Group, the two IPOs in 2007, hit new lows in the past several days, so no one believes anyone may go after them. Stay tuned.

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