(Bloomberg) -- Humana Inc. shareholders have the most to lose if the health insurer gets spit out of the tide of consolidation sweeping the industry.

Speculated as the likeliest target among the top five U.S. managed-care providers, Humana could be left to fend for itself--or forced to take a lower offer than it might like--if potential suitors merge with each other instead.

Anthem Inc. had weighed a bid for Humana, but on Saturday announced a $47 billion proposal for Cigna Corp. While Cigna rejected the $184- a-share cash and stock offer, Anthem reiterated it on Monday.

Further complicating the deal drama, both Anthem and Cigna continue to be in discussions to acquire Humana, according to people familiar with the matter, who asked not to be identified because the information is private.

If Anthem and Cigna agree to a deal, Humana could be left with only one suitor: Aetna Inc. In that scenario, Humana doesn’t have much leverage to push for a higher valuation and a transaction could happen below the current share price, according to Christine Arnold of Cowen Group Inc.

“If Aetna is interested in Humana, these events sure strengthen their hand at the negotiating table,” said Brian Wright, a New York-based analyst at Sterne Agee CRT.

A takeover at a low price may be better than nothing. That could be the result if the biggest health insurer of the bunch, UnitedHealth Group Inc., decides to get in the mix and target Aetna for itself.

Downside risk

After climbing to a record amid growing takeover speculation, Humana stands to fall as much as 40 percent to $120 a share without a deal, said Chris Rigg of Susquehanna International Group. The company has missed analysts’ earnings estimates for three straight quarters and probably will reduce its guidance for 2015, the New York-based analyst said.

“Absent the M&A speculation, it would be significantly below $200,” Rigg said.

Humana fell 6.1 percent to $189.94 a share on Monday in New York. UnitedHealth declined 0.1 percent, while Aetna, Anthem and Cigna all gained.

UnitedHealth, with a market value of $114 billion, could go after Aetna to thwart an Aetna-Humana deal. That’s because if Aetna merged with Humana, the combined company would be too big for UnitedHealth to buy without raising antitrust alarms. A UnitedHealth-Humana deal isn’t an option because of the two companies’ significant overlap in Medicare Advantage, the private-company policies offered for the government-sponsored program for the elderly.

Still possible

Humana shareholders shouldn’t give up all hope just yet. Arnold of Cowen says an Aetna-Humana combination is still more probable than Aetna-UnitedHealth.

Bank of America analyst Kevin Fischbeck also puts a lower probability on UnitedHealth making an acquisition, mostly because it doesn’t need one as the biggest and fastest-growing health insurer.

For Humana, “I still think the most likely scenario is that they will get taken out by Aetna,” Rigg of Susquehanna said. He estimated a takeover valuation in the $200 range, but cautioned a bid could be for more like $180 if due diligence shows that Humana’s earnings are likely to fall.

Instant Insights /

Humana has farthest to fall if frozen out from deals

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