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Jan 04 12:02 pm
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All Comments by Paul Price »Coventry Health: Option Combination with Good Risk/Reward [View article]
1. Coventry will be acquired.
Currently trading just under $15 per share, Coventry Health looks to be an attractive target for another second-tier health plan company. They have solid operations in many secondary and tertiary markets, some decent business in Medicare and other governmental programs, and their work comp sub is wondrously profitable. Expect it to get bought some time this year - likely after the credit markets loosen enough for potential acquirers to feel a little more comfortable. As to what happens with Coventry's comp business, more on that when the time comes.
It's entirely possible if there is credit availability for LBOs.