Aetna close to buying Humana

28 Jun 2015 | Author: | No comments yet »

Health Stocks Soar After Obamacare Ruling, Reports of Aetna Merger.

With Thursday’s Supreme Court ruling on President Barack Obama’s health-care overhaul out of the way, health insurers and hospitals can get back to making deals. A new round of consolidation in the health insurance industry appeared closer as companies seek to grow larger, driven in part by cost-cutting and opportunities that are part of the Affordable Care Act. Aetna, the second-largest U.S. health insurer by market value, is closing in on an acquisition of Humana and could reach a deal as early as this weekend. (Bob Child, Associated Press) Stock futures are staying relatively steady despite drops in foreign markets. Uncertainty over the case was the biggest obstacle to mergers and acquisitions in the health-care industry, said Bill Bithoney, a managing director in the consulting firm BDO USA’s health-care advisory practice. “People didn’t know what was going to happen.” Now that they do, consolidation may speed up.

The machinations of Humana — set against a backdrop of frenzied merger discussions within the insurance industry — received an extra jolt from the Supreme Court’s ruling on Thursday that the government could furnish tax subsidies for poor and middle-class Americans to buy health insurance. Top winners included HCA Holdings, which rose approximately 9 percent, LifePoint Health, which rose 7.6 percent, Tenet Healthcare, up 12.29 percent, Universal Health Services, which rose 7.73 percent, and Community Health Systems, which rose approximately 13 percent. Insurers, especially, had been counting on those billions of dollars in tax subsidies to draw in new customers, particularly as Medicare and Medicaid turn to private health plans to offer coverage. On June 16, Fortune’s Shawn Tully wrote that “In the merger world, no sector is hotter than health insurance” and that if UnitedHealth and Aetna “were combined today, they would rank fifth on the Fortune 500, leapfrogging the likes of AT&T, Ford, and Apple.” But if the number of health insurers declines, the number available to a state’s consumers on the health care exchanges, which in some states is already very small, will shrink further—and provide even less choice to consumers. Anthem’s stock rose 1.41 percent Thursday amid increased speculation about industry mergers, while Humana was up 7.1 percent by the end of the market day.

Investors, too, were heartened by the ruling as shares in the major health insurers jumped on Thursday after the Supreme Court announced its decision. Trading in Humana’s stock was briefly halted and its price gained more momentum after Bloomberg News reported that it was near a deal to sell itself.

The ruling could also clear the way for hospital acquisitions, and stocks of hospital companies rose Friday, extending Thursday’s jump following the ruling, which kept millions of potential patients insured instead of showing up in the emergency room without coverage. Then again, maybe the market’s moves are not so surprising when we consider that a single-payer system is what is working for people in the U.S. who are over 65 (with Medicare)—and it’s what works well in many countries around the world. That figure is projected to double next year, leaving plenty of expansion potential for both sectors. “Most insurers are breathing a sigh of relief and getting on with their business,” said Dan Mendelson, chief executive of Avalere Health. Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (http://www.thevaluealliance.com), an independent board education and advisory firm she founded in 1999.

But Humana has struggled to meet Wall Street’s profit expectations for much of the last year, though it enjoyed rises in both its membership rolls and its revenue in the first three months of the year. The company has been working with bankers at Goldman Sachs to sift through its potential deal options, fielding expressions of takeover interest from a number of suitors. While Humana is perhaps the least expensive takeover target within the big five insurers, with a market value of $27.6 billion, it faces a few distinct issues. Among them is that its rival with the biggest financial resources to pursue a transaction, UnitedHealthcare, would most likely be barred by government regulators because both companies have major operations tied to Medicare. With UnitedHealthcare and Anthem both pursuing two of the most logical buyers of Humana, the smallest insurer risked being left alone — and competing against far bigger rivals — if it did not strike its own deal ahead of other potential transactions.

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UPDATE 1-Western Refining to buy rest of Northern Tier

20 Jan 2016 | Author: | No comments yet »

JPMorgan Chase & Co. Upgrades Northern Tier Energy LP (NTI) to “Neutral”.

Under the deal, Northern Tier unit holders would receive $15 a unit in cash and 0.2986 Western Refining share for each common unit held, or roughly $26.21 a unit based on Monday’s close. EL PASO, Texas and TEMPE, Ariz., Dec. 21, 2015 (GLOBE NEWSWIRE) — Western Refining, Inc. (NYSE:WNR) and Northern Tier Energy LP (NYSE:NTI) today jointly announced that they have entered into a merger agreement whereby Western will acquire all of NTI’s outstanding common units not already owned by Western. Northern Tier Chief Executive Dave Lamp in prepared remarks Monday said that the MLP model “has not been rewarded by the equity market, as evidenced by the historical disconnect between NTI’s high yield and low unit price.” “With a simplified corporate structure and diverse geographic base, the new Western will be well positioned to unlock additional value for shareholders,” Mr. As an alternative to the cash and stock consideration, each NTI unitholder may elect to receive, per NTI unit, either $26.06 in cash or 0.7036 of a share of WNR.

Assuming completion of the proposed transaction, NTI will become a wholly-owned subsidiary of WNR and NTI common units will cease to be publicly traded. Jeff Stevens, President and CEO of WNR said, “The merger of Western and NTI will result in the combined entity owning three of the most profitable independent refineries on a gross margin per barrel basis, with direct pipeline access to advantaged crude oil combined with an integrated retail and wholesale distribution network. The terms of the merger agreement were approved by the WNR Board of Directors and the Conflicts Committee of the Board of Directors of NTI’s general partner, which negotiated the terms on behalf of NTI. Four investment analysts have rated the stock with a hold rating, five have assigned a buy rating and one has issued a strong buy rating to the stock.

The call and slide presentation can be accessed on the Investor Relations section of Western’s website, www.wnr.com, and on the Investor Relations section of Northern Tier’s website at www.northerntier.com. The Company has refining, retail and logistics operations that serve the Petroleum Administration for Defense District II (PADD II) region of the United States. Goldman Sachs & Co. acted as financial advisor to Western, and Vinson & Elkins, Davis Polk & Wardwell and Richards Layton & Finger acted as legal counsel to Western. This press release includes “forward-looking statements” by Western (which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995) and by NTI.

The Company’s retail segment operated 165 convenience stores under the SuperAmerica brand and also supported 89 franchised convenience stores, which are also operated under the SuperAmerica brand. These statements are subject to the risk that the merger is not consummated at all, including due to the inability of Western or NTI to obtain all approvals necessary or the failure of other closing conditions, as well as to the general risks inherent in Western’s and NTI’s businesses and the merged company’s ability to compete in a highly competitive industry.

If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. In addition, Western’s and Northern Tier’s business and operations involve numerous risks and uncertainties, many of which are beyond Western’s and NTI’s control, which could materially affect their respective financial condition, results of operations and cash flows and those of the merged company.

The forward-looking statements are only as of the date made, and neither Western nor NTI undertake any obligation to (and each expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval in any jurisdiction where such an offer or solicitation is unlawful. Any such offer will be made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, pursuant to a registration statement filed with the SEC. The retail segment includes retail service stations, convenience stores, and unmanned fleet fueling locations in Arizona, Colorado, New Mexico, and Texas. Beyersdorfer (602) 286-1530 Michelle Clemente (602) 286-1533 Northern Tier Investor and Analyst Contact: Paul Anderson (651) 458-6494 Alpha IR Group (651) 769-6700 nti@alpha-ir.com Media Contact: Gary Hanson (602) 286-1777

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