Humana Refutes Rumors It’s Interested In Buying Centene In Rare Step To Quash ‘Significant Investor Speculation’
Humana had long been seen as a potential acquirer of Centene, the biggest player in Medicaid managed care. Medicare-focused Humana has said it wants to grow in the Medicaid business. Yet Humana was also seen by analysts as unlikely to mount a hostile bid, an unusual move in the managed-care industry.
Centene shares are tumbling after Humana took the rare step of publicly refuting reports that it's interested in buying the company. Centene Corp., based in St. Louis, is in the midst of a $15 billion takeover of WellCare, another insurer specializing in government funded health coverage. Humana said in a prepared statement Monday that it will not make a bid for Centene, which specializes in running state-based Medicaid coverage programs. Humana is one of the nation's largest providers of privately run Medicare Advantage plans. (6/3)
The unusual announcement suggests Centene鈥檚 agreement in March to buy WellCare for $15.3 billion will move ahead, though some activist investors had pushed for the St. Louis-based health insurer to sell itself. Humana, of Louisville, Ky., said in a filing with the Securities and Exchange Commission Monday that 鈥渋n light of the significant investor speculation and persistent market rumors,鈥 it was making a one-time statement to 鈥渃onfirm that the company will not make a proposal to combine with Centene as an alternative to Centene鈥檚 proposed transaction with WellCare Health Plans Inc.鈥 Humana said it planned no further comment. (Wilde Mathews, 6/3)
WellCare is still trading at a steep discount to Centene鈥檚 cash-and-stock offer, which is worth about $300 a share. On Monday morning, WellCare shares were up 2.2 percent to $282.25. The gap can be interpreted as a sign of investor doubts that the deal will close. (Pfanner, 6/3)
