Team Health Holdings Inc. (NYSE: TMH), which includes healthcare staffing provider D&Y, rejected a merger offer by AmSurg Corp., in an announcement today. The proposal has a total enterprise value of $7.8 billion, based on AmSurg’s closing stock price Oct. 19, according to AmSurg.

Team Health reported the deal was previously rejected by its board.

“The Team Health board reaffirmed its conclusion to reject AmSurg’s proposal as it undervalues the company and contains significant execution risk,” Team Health President and CEO Michael Snow said in a statement. “We have great confidence in our ability to continue delivering value for TeamHealth stockholders and remain focused on realizing the benefits of our agreement with IPC Healthcare, which is on track to close in the fourth quarter.”

Both Team Health and AmSurg provide outsourced physician services. AmSurg posted revenue of $1.62 billion in 2014. TeamHealth posted net revenue of $2.82 billion in 2014; however, revenue for its D&Y healthcare staffing operations totaled $82 million, making it the 21^st-largest healthcare staffing firm in the US.

The proposal calls for the combined company to take the Team Health name, and the board would include representatives from both AmSurg and TeamHealth. AmSurg President and CEO Christopher Holden would be CEO of the combined firm.

"Our proposed combination will be transformational for both AmSurg and TeamHealth shareholders as well as for the physician services sector as a whole,” AmSurg President and CEO Christopher Holden said in a statement. “TeamHealth shareholders will receive immediate cash value equivalent to 22% of its market capitalization, and share equally in our combined company’s upside."