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Orthofix Medical gains after receiving $23/share takeover offer from PE firms

Orthofix Medical (NASDAQ:OFIX) rose 7.3% after disclosing it received an unsolicited takeover interest from two private equity firms for $23/share in cash.

Orthofix (OFIX) said it received a non-binding indication of interest from two unidentified private equity sponsors, according to an 8-K filing on Wednesday. The offer is subject to due diligence, arranging of debt financing and the completion of unspecified regulatory approvals.

The offer comes after Orthofix (OFIX) in October agreed to merge with SeaSpine (NASDAQ:SPNE). Under the agreement Orthofix shareholders will own ~56.5% of the combined company, and SeaSpine shareholders will own the remaining ~43.5%.

Orthofix (OFIX) said in the filing on Wednesday that after reviewing the unsolicited offer its board board unanimously determined that the SeaSpine merger transaction continues to be in the best interests of Orthofix and its holders.

"The Orthofix board further unanimously determined that it is unable to conclude that the indication of interest is reasonably likely to lead to a superior proposal under the terms of Orthofix’s merger agreement with SeaSpine," Orthofix said in the filing.

The $23/share offer represents a 28% premium to Orthofix's (OFIX) closing price on Wednesday and a 25% premium to the day before OFIX announced its deal with SeaSpine on Oct. 11. Orthofix's shares plunged 19% on the day it disclosed its transaction with SeaSpine. SeaSpine fell 1.5% in after hours trading on Wednesday.

A special meeting of Orthofix (OFIX) has been scheduled for Jan. 4 to vote on a proposal to approve the issuance of Orthofix common stock in the proposed SeaSpine (SPNE) deal.

Orthofix (OFIX) and SeaSpine (SPNE) announced earlier this month that John Bostjancic will serve as CFO for the new combined company.