Susquehanna Comments On 'Crazy Times' In Healthcare Services

Humana Inc HUM might get left standing at the end of a musical chairs merger game, according to an analyst.

Human shares are up more than 16 percent in the past month on a potential take out by CIGNA Corporation CI or Aetna Inc AET.

But "we're even more nervous about Humana shares" because of news Monday that both of Humana's potential acquirers may become buyout targets themselves, Susquehanna's Chris Rigg said.

Humana has fallen more than 3 percent since the latest wrinkle emerged in The Wall Street Journal. Humana shares traded recently at $204.28, down 2.7 percent.
UnitedHealth Group Inc. UNH made a preliminary takeover approach to Aetna in the last few days, WSJ said on Monday.

Separately, Anthem Inc ANTM and Cigna have been "in discussions about a deal for months," according to the same report, which said Cigna has rebuffed Anthem's advances.

"These disclosures greatly complicate a potential takeout of Humana by either Cigna or Aetna," Rigg said.

The successful acquisition of Humana would likely require a shareholder vote from either Aetna's or Cigna's owners.

This "effectively allows for activists to come in and block the purchase" of Humana on the assumption that their shares would be worth more in a sale to either Anthem or UnitedHealth, according to Rigg.

From United's perspective, if it believes that either Aetna or Cigna will win the Humana auction, "it's now or never to buy one of them," Rigg said.

Once Humana is merged into either Aetna or Cigna, "then anti-trust issues in the Medicare Advantage business would likely block a future deal," according to Rigg.