American Well becomes second suitor for Talkspace, but online-therapy firm said no: Source
Online-therapy app Talkspace (NASDAQ:TALK) recently received but declined a buyout approach from American Well Corp. (NYSE:AMWL) − the second would-be suitor that the struggling company has spurned in recent weeks, Seeking Alpha has learned.
TALK rejected American Well's expression of interest before any numbers were discussed, according to a person familiar with the company's operations.
However, the source said Talkspace (TALK) recently shot down a similar approach from privately held Mindpath at about $2.50 to $3 share. That's well above the roughly $1.53 a share that TALK was trading at Monday, and would value the company at up to $465M.
The person familiar with the situation added that some venture-capital firms with stakes in Talkspace (TALK) also had a call recently with the company's management to push for a merger or sale of the firm. Representatives for Talkspace and American Well (AMWL) declined to comment to Seeking Alpha.
Talkspace (TALK), which has counted Olympic swimming gold medalist Michael Phelps and singer Demi Lovato as celebrity endorsers, went public through a high-profile SPAC deal last year, but has struggled since then.
The stock has fallen some 90% from the $11.51 that Hudson Executive Investment Corp., the SPAC that brought TALK public, had closed at just prior to announcing the deal. TALK sank 12% on Monday alone, changing hands at $1.51 shortly after 3 p.m. ET.
The company's co-founder and CEO Oren Frank also stepped down in November.
A potential tie-up between Talkspace (TALK) and American Well (WELL) could make sense because it would complement AMWL's efforts in its telemedicine business, the person familiar said. Amwell already offers a tele-psychiatry service, while TALK offers online psychotherapists.
Citi analyst Daniel Grosslight wrote in a note early this month that an acquisition of TALK is more likely than he had originally contemplated.
Grosslight said that some major shareholders of Talkspace (TALK) that he had spoken with were supportive of a sale. He also highlighted that fact that there's been no update on the hiring of a permanent CEO to replace Oren Frank. That could point to the idea that the company is thinking of a sale instead.
Additionally, Grosslight wrote that interim CEO Doug Braunstein, who formally headed Hudson Executive Investment Corp., was recently awarded equity compensation that would vest upon any change on control, potentially incentivizing him to make a deal.