Imaging services firm RaytelMedical last week launched a bid to purchase Medical Diagnosticsby acquiring all of the Burlington, MA, firm's common stock. MDIresponded tepidly to the offer, claiming that it was motivatedby Raytel's desire to distract MDI
Imaging services firm RaytelMedical last week launched a bid to purchase Medical Diagnosticsby acquiring all of the Burlington, MA, firm's common stock. MDIresponded tepidly to the offer, claiming that it was motivatedby Raytel's desire to distract MDI management from upcoming litigationbetween the companies. A trial is scheduled for next month.
Raytel, of San Mateo, CA, announced Nov. 29 that it was preparingto begin a tender offer for all outstanding shares of MDI commonstock. Raytel said it was prepared to offer MDI shareholders $5a share, a premium of about 38% over MDI's stock price on Nov.25. Raytel valued the deal at $18.5 million.
Raytel offers fixed-site diagnostic imaging services in marketsin California and the Northeast. MDI is headquartered in the Northeastand operates fixed sites as well as a number of mobile routes.The firms share two mobile imaging routes as part their MassachusettsMobile Imaging Venture (MMIV) joint venture.
MDI is a good acquisition target because the company's centersand routes complement Raytel's existing center network, accordingto Richard Bader, Raytel chairman and CEO.
MDI chairman, president and CEO John Lynch responded to theoffer by stating that Raytel had provided MDI with few detailsabout its proposed acquisition. The two firms are involved inlitigation over MDI's development of a fixed site in Massachusetts,in which Raytel believes it should have partial ownership. MDIclaims Raytel has not cooperated in the operation of MMIV andis asking for the dissolution of the joint venture. Lynch statedthat Raytel's offer could be an effort to impair MDI's abilityto prepare for a Jan. 9 trial on the issue.
Bader told SCAN that Raytel does not consider the litigationto be a material issue in the acquisition. Raytel announced onDec. 5 that it had begun its acquisition effort and is tryingto collect enough shares to acquire a majority interest in MDI.
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