Health insurers have been feeling more pressure due to the growing competition especially after the partnership between Humana Inc (NYSE:HUM) and Aetna Inc (NYSE:AET).
Cigna is feeling the heat and there is a possibility that the company might be considering a pair up with Anthem Inc (NYSE:ANTM) just a month after turning down a proposal from the same company. According to Ana Gupte, an analyst at Leerink Partners, Cigna does not have many options at the table and Anthem is the best option to merge with.
Aetna was lucky to enter into a $35 billion cash-and-stock deal with Humana, thus joining the long list of firms conglomerate deals that have been trending this year. The move had been heavily anticipated due to pressure after the Obama care campaign sent them in the search for new customers.
Cigna had initially turned down offers from Anthem for a cash and stock deal of up to $184 per share. Cigna has been holding back on account of management and governance concerns. Some sources revealed that Cigna and Anthem had held talks to discuss plans to buy out Humana. According to Gupte, Anthem and Cigna can strike a deal at about $190 to $195 a share especially now that Humana is out of the picture.
Anthem’s spokeswoman, Kristin Binns and Matthew Asensio rom Cigna did not make any comment on the matter. However there are signs that investors have great expectations towards the future of the two companies. So far, Anthem’s shares have climbed by 30% this year. Cigna shares went up 57% to close at $161.29 on Thursday.
There is also a possibility that UnitedHealth Group Inc. (NYSE:UNH) might also get in on the action. UnitedHealth is the largest health insurer in the United States. Sources claim that a report from the Wall Street Journal had publishedan article a month ago where Unite health was considering to acquire either Cignna or Aetna. Aetna’s Acquisition of Humana will be significant towards creating a wider presence in the market.
