- Centene said it remains "committed" to its $17 billion WellCare acquisition amid reports of activist investors wanting the company to explore a sale of itself first. Centene told Healthcare Dive the deal is in the best interest of shareholders — who are slated to vote on the deal June 24 — and argued it "will deliver significant upside growth and profitability."
- However, Centene said last week it has engaged other companies about potential deals. The company noted that over the past two years it has participated in "preliminary conversations" with others in its industry on a range of topics including potential combinations, though no specific companies were mentioned, according to its recently released detailed filing on the WellCare merger.
- "We have no comment on our stake," a spokesperson for hedge fund Third Point told Healthcare Dive in an email. Third Point is one investor that wants Centene to consider putting itself up for sale before moving ahead with its purchase of rival WellCare, according to The Wall Street Journal.
The Centene-WellCare combination continues to face pressure as it nears the date when shareholders will vote on the union.
Reports earlier this month, citing unnamed sources, cited a potential takeover by Humana. Either way, the deal will likely face antitrust scrutiny, which hospitals have been pushing. Last week, Centene and WellCare disclosed federal regulators within the antitrust division requested additional information and documents about the transaction from the two companies, according to an SEC filing. Details about what regulators requested were not disclosed.
But some analysts have thrown cold water on the idea Centene would go for a sale instead of acquiring WellCare.
Ana Gupte, an analyst with SVB Leerink, previously noted Centene's leader is a "buyer not a seller." CEO Michael Neidorff has put together a string of acquisitions to build the company into the behemoth it is today. The most recent acquisitions include its buy of New York-based Fidelis Care, which gave Centene the largest Medicaid market share in New York. Centene also acquired California's Health Net in 2016, giving it a substantial presence in the state.
Last week, the company released its merger proxy, unveiling details about the WellCare acquisition. The merger filing outlines termination fees if the deal does not go through and outlines how it came together.