UPDATE 1-Health insurer Humana considering selling itself

29 May 2015 | Author: | No comments yet »

Humana Said to Explore Sale After Approach by Insurer Cigna.

Humana—which had a market value of about $27 billion before its stock rose Friday—is working with Goldman Sachs on a potential sale, The Wall Street Journal reported, citing sources. Humana Inc. is exploring a sale, after the health insurer was approached by Cigna Corp. about a potential deal, a person with knowledge of the matter said. Acquiring Humana would vault Cigna to the lead in the market for Medicare Advantage policies, the health insurer-run version of the U.S.’s program to cover the elderly and disabled. With a 3.3% stake, Robbins’ Glenview Capital Management was the biggest hedge fund owner of Humana at the end of the first quarter and was the company’s eighth biggest owner overall.

Alex Kepnes, a spokesman for Humana, didn’t immediately respond to requests for comment, while Matthew Asensio, a Cigna spokesman, and Cynthia Michener, a spokeswoman for Aetna, declined to comment. In an interview this month at Humana’s headquarters in Louisville, Kentucky, Humana Chief Executive Officer Bruce Broussard didn’t want to talk about whether his company could be a takeover target. “In general I would agree, over time that consolidation will happen,” Broussard said. “Will Humana be part of it?

Robbins had fueled his returns in recent years–one of his hedge funds has posted a three-year annualized return of 57%–by betting big on hospital stocks like HCA Holdings that he believed would benefit from Obamacare. Though with an aging U.S. population and the disruption to insurance markets from 2010’s Patient Protection and Affordable Care Act, the sector may be ripe for deals. Since May 2010, Humana’s shares have almost quadrupled, compared with a 160 percent increase in the Standard & Poor’s 500 Managed Health Care Index of five insurers.

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