NEW YORK (TheStreet) -- Shares of Team Health  (TMH) are up by 15.28% to $60.30 at the start of trading on Tuesday morning, after physician services outsourcing company AmSurg (AMSG) offered to buy its rival for $71.47 per share in cash and stock, according to the Wall Street Journal.

Team Health has rebuffed the offer however, according to the Journal's sources, and is instead looking to complete an acquisition it announced in August.

The bid is worth a total of $7.8 billion with the per share purchasing price representing a potential 36% upside from the stock's closing price yesterday.

AmSurg proposed the merger in an October 12 letter to Team Health's board that it made public today.

Both companies have similar market caps and ownership of the combined company would be split evenly between the two sets of shareholders.

AmSurg shares are down by 5.21% to $74.02 so far today.

Separately, TheStreet Ratings team rates TEAM HEALTH HOLDINGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate TEAM HEALTH HOLDINGS INC (TMH) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 30.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • TEAM HEALTH HOLDINGS INC's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TEAM HEALTH HOLDINGS INC increased its bottom line by earning $1.35 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($2.71 versus $1.35).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, TEAM HEALTH HOLDINGS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income has decreased by 4.2% when compared to the same quarter one year ago, dropping from $30.20 million to $28.94 million.
  • The gross profit margin for TEAM HEALTH HOLDINGS INC is rather low; currently it is at 18.58%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 3.29% is above that of the industry average.
  • You can view the full analysis from the report here: TMH