Updating Triad’s LBO Hopes, No Word Yet

Updating on Triad Hospitals (TRI-NYSE):  I was searching around for more research and more news on Triad on all the market talk and hopes of a LBO coming to the company.  This is after the post from last night where we asked at what price a deal would still make sense. 

Argus Research says it recently raised its rating to a Buy from a Sell, and it has a $52 target.  Their report talks about improving metrics and implementation of more universal health coverage in either implemented or proposed four states actually helping the company.  This report makes no mention of an LBO, MBO, or merger.  Argus is not a commission-based research shop in the traditional brokerage firm sense, so while they have lower exposure they are deemed as very independent and unbiased by the street.

TRI shares are up to roughly $42.50 after having been briefly under $40 in the last 8 trading sessions.  This is all on hopes of an acquisition, as we noted last night.  TRI still has activist shareholder attempts pushing it, so it is possible this one could improve on its own without an acquisition.  However, if a deal or the hint of a deal does not come from the company in the next two days then one would expect the short term traders to take profits in case a deal does not occur.  TRI shares are down 0.5% at $42.25 and profit taking could be expected if nothing gets hinted at soon.

The old ties to HCA are still there on a perceived basis after they were spun off in 1999, but no one seems to note it any more.  With earnings coming up, the company may have gone quiet. 

The talk is out there, and we could reasonably see a range of $46 to $54 that outside firms would still find value, but those numbers are of course subjective and beauty is in the eye of the beholder.

Jon C. Ogg
January 24, 2007