The Georgia-based disease-management outfit said Tuesday that it is pursuing strategic initiatives that could lead to a possible buyout of the company. While Matria said that it has reached an "advanced stage" in its efforts, the company stopped short of guaranteeing a sale.
The company has suspended plans to give 2008 guidance, originally scheduled for release this Thursday, in the meantime.
Matria's stock -- which earlier in the day fell as much as 12% on an analyst downgrade -- soared 22% to $29.95 on the news. That move pushed the shares into the upper half of their 52-week trading range.Just a year ago, Matria fully intended to find success on its own. Back then, Matria was the buyer -- having just acquired rival CorSolutions -- with big plans to dominate the booming disease-management space. But that ambitious acquisition caused unexpected headaches, leading to painful contract losses and financial shortfalls. Indeed, virtually every quarter brought a new disappointment over the course of the past year. Thus, even before this week's news, analysts had started to wonder if major changes -- including a management shakeup or outright sale -- could be on the way. In an ill-timed downgrade, issued just hours before Tuesday's announcement, Credit Suisse analyst Michael Glynn slapped an underperform rating on the stock. Glynn, whose firm has investment banking ties to Matria, believes that the company has a possible revenue shortfall looming, and may see its stock come under pressure as a result. Glynn, for one, felt uncomfortable relying on the buyout prospects that seemed to be boosting the company's shares. "In late December, amidst a lack of news, take-out speculation emerged that suggested Matria would be a good strategic fit with a pharmacy or a supermarket with pharmacy operations," he wrote. "Strategically, it makes some sense ... However, we have no reason to believe