(Bloomberg) — Humana Inc. (NYSE:HUM) 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. (NYSE:ANTM) had weighed a bid for Humana, but on Saturday announced a $47 billion proposal for Cigna Corp. (NYSE:CI). 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. (NYSE:UNH), decides to get in the mix and target Aetna (NYSE:AET) for itself.
Downside risk
