Market Overview

Humana Reportedly Considering Sale Of Company


Shares of Humana Inc (NYSE: HUM) jumped 20 percent on Friday afternoon after The Wall Street Journal reported that the company is considering a sale.

According to WSJ, the health insurer has been approached by a few interested parties, and is evaluating the options with consultants at Goldman Sachs Group, people familiar with the matter said.

Among the companies having preliminary discussions with Humana are Aetna Inc (NYSE: AET) and CIGNA Corporation (NYSE: CI). If the move were to happen, it could “trigger a widely anticipated wave of consolidation in the industry (…) which has been relatively quiet since a spate of tie-ups in 2011 and 2012 that included Aetna’s $5.7 billion purchase of Coventry Health Care Inc. and Cigna’s acquisition of HealthSpring Inc. for $3.7 billion. Both deals were aimed at building scale in Medicare and Medicaid, which is geared toward lower-income people.”

Shares of Humana recently traded at $213.02, up 19.4 percent.

Related Link: Portfolio Manager Minyi Chen On Why Certain Companies Are Likely M&A Targets

Minyi Chen, portfolio manager of AdvisorShares Trust, recently told Benzinga that, “because of its strong presence in Medicare-related business,” Humana “could be a very likely target of a larger insurance company.”

Aetna and Cigna also rose on the news of a possible acquisition of Humana.

Humana is up more than 48 percent year-to-date, outperforming the S&P 500’s 2.64 percent surge.


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