Market stakeholders have speculated that Humana could make a proposal to combine with Centene as an alternative to Centene's planned merger with WellCare Health Plans.
Humana Inc. signaled in an unusual filing Monday morning with the Securities and Exchange Commission that it has no intention of pursuing a merger with fellow health insurer Centene Corp.
The note—which sent Centene shares tumbling more than 8% shortly after markets opened—came after Centene's proposed merger with WellCare Health Plans hit a bit of a speed bump, with antitrust regulators from the U.S. Department of Justice indicating they will scrutinize the deal that has been criticized by the American Hospital Association and others.
A report last month by Reuters' Carl O'Donnell and Svea Herbst-Bayliss added fuel to rumors that Humana would be interested in merging with Centene if the WellCare deal falls through.
Humana said in Monday's SEC filing that its "long-standing policy is not to comment on rumors or speculation regarding possible M&A activity."
"However, in light of the significant investor speculation and persistent market rumors regarding the Company's intentions with respect to pursuing a combination with Centene … the Company has chosen to make a one-time, limited exception to its no-comment policy (which continues in effect) and confirm that the Company will not make a proposal to combine with Centene as an alternative to Centene's proposed transaction with WellCare Health Plans, Inc.," the SEC filing states.
"The Company does not intend to make any further statement regarding the foregoing," Humana's filing adds.
As Centene shares sank, Humana's rose more than 5% Monday morning.
SVB Leerink analyst Ana Gupte told the St. Louis Post-Dispatch that Humana needed to respond to claims it had been putting pressure on its stock.
"Shorter term activist shareholders of Centene may be disappointed by it, but large long-only institutional share holders of both Centene and Humana are likely relieved," Gupte wrote in an email to the Post-Dispatch.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.
As the future of Centene's proposed WellCare merger remain murky, some had suggested Humana might be waiting in the wings.
While share prices slumped for Centene and rose for Humana, one analyst says longer-term investors for both 'are likely relieved.'