Wall Street analysts continue to closely monitor the drama playing out among the major health carriers.
The possibility that an acquisition was imminent by Aetna of either Cigna or Humana was floated Monday after an investors' meeting hosted by Ana Gupte of Leerink Partners at Aetna headquarters. She speculated that Aetna would find either of those carriers attractive targets due to their Medicare business, a segment where Aetna has a gaping hole.
The stocks of all three bounced up and down Tuesday and Wednesday on the speculation. Shares of all three closed higher on Thursday, with Aetna experiencing the highest uptick — 1.54 percent.
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Speculation focused on Humana as the most likely target. But analysts say Aetna would have to be ready to pay about $200 a share — nearly $30 above the closing price Thursday of $174.25.
But with the insurance industry being propelled higher on Wall Street by the increased business from the Patient Protection and Affordable Care Act, that price could look like a bargain in six months.
"Despite fluctuations in its stock price, Humana's legacy makes it an attractive acquisition target," said FierceHealthPlayer analyst Dori Zweig, referring to its booming Medicare business.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
