Home Health Care Humana officially pulls the plug on Centene acquisition rumors

Humana officially pulls the plug on Centene acquisition rumors

68
0
SHARE

Louisville, Kentucky-based Humana has broken its long-standing policy of not commenting on potential M&A deals with a SEC regulatory filing stating it will not pursue a combination with Centene citing “significant investor speculation and persistent market rumors.”

Humana said it would have no further comment in the filing.

In March, Centene announced its intention to purchase fellow insurer Wellcare in a deal valued at $17.3 billion to create the fourth largest insurer in the country based on membership.

The WellCare acquisition would position the Centene more strongly in the more politically stable Medicaid and Medicare markets, where it would rank first and fourth respectively, by membership. Centene touted its market opportunity in Managed Medicare and its improved ability to handle dual-eligible patients.

In the intervening months, however, a group of shareholders and activist investors have signaled they may try to scuttle the deal in favor of an opportunity to sell Centene to a larger competitor like Humana.

Amid the rumors, Centene has forged ahead with the regulatory legwork necessary for the WellCare acquisition and recently announced plans to add Wellcare CEO Ken Burdick and Wellcare executive vice president and CFO Drew Asher to the combined company’s executive leadership team.

Centene CEO Michael Neidorff underscored his commitment to the WellCare deal in an interview with Yahoo Finance saying that the company’s long-term investors agree with the merger.

“It’s the right acquisition. We don’t just do this idly or quickly, the board looks at all the alternatives, the various things we can do, the strategic alternatives. This is right combination for our shareholders,” he said.

The boards of the companies have both approved the deal and a shareholder vote on the merger is scheduled for June 24.

The companies have stated they expect the deal to close by the first half of 2020, but may face antitrust scrutiny from the Department of Justice which has requested more information from the companies on the merger plans.

On an investor call, Neidorff acknowledged that Centene may have to divest from some of its business in Nebraska and Missouri to facilitate the closing of the deal.

Photo: Kritchanut, Getty Images

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

sixteen − 16 =