Health Management (HMA) Could Go for $18.50/Share; No Imminent Deal Expected - Analyst

Health Management Associates (NYSE: HMA) is ticking higher on speculation that it might be a takeover target.

Susquehanna's Chris Rigg commented today that Community Health Systems (NYSE: CYH) could still be interested in acquire Health Management. The analyst cites a conversation with management Thursday afternoon, though specific comments on Health Management weren't made.

Community Health might be looking for a friendly acquisition of Health Management.

Rigg sees a potential takeover valuation of Health Management in the 7x - 8x forward EBITDA range, which leads to a purchase price of about $18.50.

Should Community Health go all cash, Rigg thinks the deal could add about 60 cents to fiscal 2013 EPS estimates (Rigg is currently at $3.55). In a half-stock, half-cash scenario, the analyst thinks the deal might be neutral to modestly dilutive until all potential synergies are in place.

However, Rigg cautioned that he'd be "very surprised" if a deal was announced soon.

Susquehanna has a Neutral rating and $12 price target on Health Management.

For an analyst ratings summary and ratings history on Health Management click here. For more ratings news on Health Management click here.

Shares of Health Management closed at $12.98 yesterday.

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