Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - AI and Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Finance
July 11, 2016 12:00 AM

Humana's stock craters further on fears of DOJ blocking Aetna deal

Bob Herman
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    AP
    File photo

    Humana's stock price fell by another 2.6% Monday because of investors' fears that the U.S. Justice Department will try to squash Aetna's $37 billion takeover of the insurer.

    Humana's stock descent began in earnest last week after antitrust trade publication MLex cited sources who said the Justice Department was skeptical about the Aetna-Humana deal and potentially was ready to sue to block it. Aetna executives were supposed to meet last Friday with top federal officials who were reviewing the transaction, including Bill Baer, according to MLex and Bloomberg.

    Humana was trading higher than $190 per share as recently as June 21. But Humana investors sold off the stock in droves last week after the Justice Department concerns were aired, falling 12% from $179.98 July 6 to $158.15 July 8. Humana was recovering Monday before dropping sharply in the afternoon amid renewed worries the feds want to block the deal.

    “If Aetna-Humana doesn't happen…it's not gonna be that pretty,” said Steven Halper, an analyst at investment bank FBR Capital Markets & Co.

    That's because Humana, one of the largest Medicare Advantage insurers in the country, has struggled with its core business and has been “consistently inconsistent” over the past several quarters, Halper said. Observers widely viewed Humana as the most likely takeover target in the run-up to the health insurance merger frenzy last year.

    However, most Wall Street analysts still give a high probability of the Aetna-Humana deal closing despite the reports coming out of Washington. Halper said the meeting between the Justice Department and Aetna was routine, and if the feds were gung-ho about stopping the deal, information would not have been leaked.

    “This could just be part of the negotiating dynamics that are going on,” Halper said, adding that the Justice Department could be pressuring Aetna and Humana to improve a possible settlement. Aetna, which has issued billions of dollars in new debt to fund the transaction, almost certainly will have to divest Medicare Advantage assets to get approval and allegedly is ready to sell off a chunk of that business.

    Aetna's key argument in acquiring Humana is that traditional Medicare and Medicare Advantage are distinct, separate markets that compete with each other. Some states such as Florida have agreed to that interpretation, but Missouri has not. The Justice Department has not weighed in on that argument.

    Aetna and Humana officials did not respond to requests for comment.

    Halper and others believe the other major pending health insurance merger, involving Anthem and Cigna Corp., has a much greater likelihood of getting nixed. Many people are worried that deal will create too much consolidation among insurers who help large national companies administer health benefits to employees.

    Last month, seven Democratic senators, including Elizabeth Warren of Massachusetts and Richard Blumenthal of Connecticut, wrote a letter urging the Justice Department to step in and halt both insurance mergers.

    Even though Humana had a down day, the Dow Jones Industrial Average closed Monday up 0.44%, while the S&P 500 ended the day ahead 0.34% and hit a high watermark for the year.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    transparency rx
    PBMs form Transparency-Rx to push for drug pricing reform
    Bright Health Group_i copy_i.png
    Bright Health inks risk-adjustment shortfall agreement with CMS
    Most Popular
    1
    CMS tries luring providers to revamped Medicare ACOs
    2
    Oregon joins other states in setting ratios for nurse staffing
    3
    Blue Shield CA taps Amazon, Mark Cuban, CVS for new PBM model
    4
    A health innovation hub grows in Lake Nona Medical City
    5
    Hospital-at-home providers push for Medicaid coverage
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing