CVS-Aetna, Cigna-Express Scripts reportedly on road to merger approval; Athenahealth in hostile takeover–or not (updated)

CVS’ pickup of Aetna, and Cigna‘s acquisition of Express Scripts are reported to be clearing the Department of Justice anti-trust review within the next few weeks, just in time for pumpkin season. The DOJ may have concerns on some assets related to Medicare drug coverage and may require a sell-off to resolve them. One potential buyer is WellCare Health Plans, which this week completed its acquisition of Meridian Health Plans and entered the S&P 500 on Monday. The Cigna-Express Scripts combine may not require any asset selloff. Seeking Alpha (report is from the Wall Street Journal).

The once blazingly hot Athenahealth is up for sale but can’t seem to get arrested by another healthcare company. Both Cerner and UnitedHealthcare passed on an acquisition. One of the larger shareholders, Elliot Management, initiated moves toward a hostile takeover in May, and in the process managed to oust founder and CEO Jonathan Bush on still-murky charges of past domestic abuse and workplace sexual harassment. Mr. Elliot is partnering with Bain Capital which owns Waystar, a revenue cycle management (RCM) company from the merged ZirMed and Navicure. Waystar could benefit from Athenahealth’s systems and IP. Mr. Bush would receive a relatively small sum in a sale –$4.8 million– with new executive chair and former GE CEO Jeffrey Immelt earning $150,000 a month in salary and $150,000 in restricted stock perhaps looking for a new job. Elliot’s reputation is that of a corporate raider–taking over businesses to strip assets and sell off the remains. New York Post, POLITICO Morning eHealth.

UPDATED 19 Sept Reports from yesterday indicate that Mr. Elliot has ‘balked’ at the $160 per share price that Athenahealth is asking, and may be angling for a lower price, according to the NY Post report. Reportedly no one else–Cerner and UnitedHealthcare–is interested, though Athenahealth has extended the bid deadline to 27 September. There may be problems uncovered by the due diligence. It’s also a recognized hardball lowball strategy to get the share price way down. The industry is betting on the latter because the former is difficult to contemplate for customers and healthcare as a whole. Also HealthcareITNews.

Categories: Latest News.

Leave a Reply

Your email address will not be published. Required fields are marked *