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Jun. 25, 2015, 10:26 AM| Jun. 25, 2015, 10:26 AM | 87 Comments
Jun. 22, 2015, 2:58 AM
- The nation's biggest health insurers, which are pursuing a series of potential megamergers due to changes in the healthcare landscape, have many market overlaps that pose challenges to competition around the country.
- On Saturday, Anthem (NYSE:ANTM) made a third offer to purchase Cigna (NYSE:CI) for $54B (although the bid was rejected), while Aetna (NYSE:AET) made a takeover offer for Humana. Those deals, if completed, would shrink the current top five insurers to a powerful big three, each with revenue on paper of more than $100B.
- UnitedHealth (NYSE:UNH), the largest industry player by revenue, has also recently jumped on the bandwagon by making a takeover approach to Aetna.
Jun. 20, 2015, 5:10 PM
- Anthem (NYSE:ANTM) has boosted its takeover offer for Cigna (NYSE:CI) and is going public with the bid after the two sides failed to reach agreement.
- Anthem's $184/share bid (cash and 31% stock) reflects a 35.4% premium to unaffected Cigna price on May 28.
- Anthem’s pursuit of Cigna comes as Cigna is eying Humana (NYSE:HUM), which has put itself up for sale, and whom now appears to be on Aetna's (NYSE:AET) radar screen.
- The five big managed-care companies are jockeying for deals that will enable them to get more efficient and better respond to changes in the healthcare landscape. Analysts say regulators will only allow one or two such combinations.
- "Anthem has been engaged with Cigna to explore a potential combination since August 2014 and is making its proposal public today following Cigna's refusal to reasonably negotiate and its insistence on securing governance matters that are not common practice in similar transactions."
Jun. 20, 2015, 4:50 PM
- Aetna made proposal in past few days. Price is unclear.
- Source: WSJ
- Previously: Humana spikes 20% after WSJ report says it wants to sell itself (May. 29)
- Previously: Consolidation talk hits the health-insurance sector (Jun. 16)
Jun. 16, 2015, 2:06 AM
- Merger talk in the health-insurance industry is heating up as firms grapple with the challenges and opportunities the federal healthcare overhaul has created.
- UnitedHealth (NYSE:UNH) has reportedly approached Aetna (NYSE:AET) about a takeover deal that would likely be valued at more than $40B, after Anthem approached Cigna with a $45B buyout offer that was rebuffed.
- Meanwhile, Aetna and others are considering buying Humana, which is looking at strategic alternatives including a sale.
Jun. 5, 2015, 2:46 AM
- General Electric (NYSE:GE) has assembled an "exploratory team" to look at moving its headquarters out of Connecticut after lawmakers passed a budget raising taxes by $1.2B.
- "I believe we should pay our fair share...but, we can compare Connecticut with other states where small and large businesses have a better environment to thrive," CEO Jeff Immelt said in a email.
- Aetna (NYSE:AET), which now faces a similar predicament, is also weighing whether to relocate its headquarters out of the state.
May 29, 2015, 2:12 PM
- Humana (HUM +19.6%) surges following a WSJ report that it is exploring a potential sale after receiving indications of takeover interest, and has hired Goldman Sachs to help it explore a potential sale.
- Sources say Aetna (AET +2.2%) and Cigna (CI +5.2%) are among companies that have held preliminary discussions with HUM.
- HUM is one of five health insurers that bankers and analysts have long considered ripe for consolidating the industry, including AET, CI, UnitedHealth (UNH +1%) and Anthem (ANTM +2.6%).
May 22, 2015, 11:14 AM
- Major health insurers in some states are proposing rate increases of as much as 51% for plans sold under the federal health law, according to a WSJ analysis, setting the stage for an intense debate over the law’s impact.
- All the insurers cite high medical costs incurred by people newly enrolled under the Affordable Care Act, saying their proposed rates reflect the revenue they need to pay claims now that they have had time to analyze their experience with the law’s requirement that they offer the same rates to everyone regardless of medical history.
- Some insurers are trying to catch up with the impact of expensive drugs such as Sovaldi, foreseeing significant pent-up demand from the newly enrolled, says a fellow at the Society of Actuaries.
- Relevant tickers: IHF, HNT, UNH, MOH, CNC, UAM, AET, CI, HUM, HCA, WCG, GTS, EMCI, MGLN
May 15, 2015, 6:05 PM
- After having exited a prior GM position a year ago, David Einhorn's Greenlight Capital bought 9.5M shares of the auto giant in Q1, per Greenlight's Q1 13F.
- Einhorn previously disclosed the purchase, along with his reasoning, in his Q1 letter. "2015 should be a better year for GM: the company is a year closer to eliminating its losses in Europe; low gas prices should stimulate demand for its highly profitable SUV and light truck product lines; raw material costs are low; and we believe that the worst of the product recalls is behind them." He also noted GM's buyback, and called earnings estimates beatable.
- A 1.7M-share stake was taken in Macy's (NYSE:M), and a 1.1M-share stake in Ingram Micro (NYSE:IM). Greenlight's stake in Chicago Bridge & Iron (NYSE:CBI) was more than doubled to 6.7M shares, and its stake in AerCap (NYSE:AER) hiked by 49% to 5.6M.
- On the flip side, Greenlight liquidated a 1.3M-share stakes in Aetna (NYSE:AET) and Amdocs (NASDAQ:DOX). The firm cut its stake in chipmaker/long-time holding Marvell (NASDAQ:MRVL) by 63% to 9M shares, and in chip equipment maker Lam Research (NASDAQ:LRCX) by 33% to 1.7M shares.
May 15, 2015, 1:57 PM
- Aetna (NYSE:AET) declares $0.25/share quarterly dividend, in line with previous.
- Forward yield 0.89%
- Payable July 31; for shareholders of record July 16; ex-div July 14.
May 13, 2015, 4:03 PM
- Humana (HUM +0.1%) spiked yesterday on the possibility that it may merge with Aetna (AET -0.3%) opined by Lerrink's Ana Gupte. Today, Sterne Agee's Brian Wright rains on the parade by saying a merger is doubtful due to Humana's premium valuation. He adds credence to his view by cutting his 2015 EPS outlook to $8.07 from $8.40 and 2016's to $9.17 from $9.71. He also cut his rating on HUM to Underperform from Neutral.
May 12, 2015, 3:57 PM
May 5, 2015, 1:09 PM
- It took a while, but the first major health insurer announces its intention to stop paying for the routine use of the laparoscopic power morcellator. Aetna (AET -2%) says it will cease coverage beginning May 15. Doctors will have to be pre-approved thereafter based on exceptions for pre-menopausal women who want to preserve fertility and have no other treatment options and women for whom other procedures could lead to severe complications or be life-threatening.
- A power morcellator has spinning blades that are used to cut uterine fibroids or the uterus into pieces so they can be removed through small incisions in the abdomen, characteristic of minimally invasive surgery. Cancer cells can hide in fibroid tissue, however, which can be spread by the spinning blades, increasing the women's risk of cancer.
- A year ago, Johnson & Johnson (JNJ -0.9%) stopped selling the product in light the risk. At about the same time, the FDA issued an advisory to clinicians to discourage the use of the device. In July, J&J started withdrawing the product from the market, including the return of already-purchased devices. In November, the FDA formally stated that the devices should not be used on the vast majority of women.
- Other insurers will most certainly follow Aetna's lead.
- Previously: Johnson & Johnson withdraws fibroid treatment device from market (July 30, 2014)
- Previously: J&J halts the sale of Ethicon device (April 30, 2014)
Apr. 28, 2015, 7:19 AM
- Aetna (NYSE:AET) Q1 results ($M): Total Revenues: 15,094.1 (+7.9%); Health Care Premiums: 12,940.1 (+8.6%); Health Care Costs: 10.240.5 (+6.9%); Total Benefits and Expenses: 13,727.5 (+6.9%); Operating Earnings: 844.3 (+16.9%); Net Income: 777.5 (+16.8%); EPS: 2.20 (+20.9%).
- Medical Benefit Ratios: Commercial: 77.4% (+0.3%); Government: 81.3% (-4.0%); Health Care: 79.1% (-1.6%).
- Membership (000s): Medical: Commercial: 19,859 (+0.2%); Medicare Advantage: 1,228 (+7.7%); Medicare Supplement: 488 (+5.6%); Medicaid: 2,095 (-1.4%); Dental: 15,555 (+0.4%); Pharmacy Benefit Management: Commercial: 10,789 (+0.5%); Total PBM: 15,425 (+0.7%).
- 2015 Guidance: Operating Earnings Per Share: $7.20 - 7.40 from $7.00.
Apr. 28, 2015, 6:02 AM
- Aetna (NYSE:AET): Q1 EPS of $2.39 beats by $0.44.
- Revenue of $15.09B (+8.0% Y/Y) misses by $370M.
Apr. 27, 2015, 5:30 PM
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Aetna Inc. is a health care benefit company, which offers traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans.
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