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Psychiatric Solutions Ends Merger

The company drops plans to buy Alternative Behavioral Services.

Psychiatric Solutions

(PSYS)

has terminated an agreement to acquire privately held Alternative Behavioral Services.

The decision was made following efforts to resolve "individual and cumulative effects of certain significant issues" that could have a material affect on Alternative Behavioral's operational and financial results, Psychiatric Solutions said in a press release Tuesday.

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Psychiatric Solutions didn't provide further details, but says it doesn't expect ending the pact to affect its 2006 earnings guidance.

Shares were falling $1.20, or 3.5%, to $33.61.