Centene gains on report of potential interest from

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Centene Corp. (NYSE:CNC) rose 6.2% in after hours trading on a report that it has received potential takeover interest from Cigna (NYSE:CI) in recent months. The talks were preliminary and didn’t lead to any agreement, according to a Bloomberg report. Talks aren’t currently taking place and its not clear if they will be revived.

Centene has gotten attention since the fall after activist Politan Capital Management took a stake in the company and was reportedly pushing the company to replace board members. In December, Centene agreed to add directors, search for new a CEO and entered into a cooperation agreement with Politan Capital Management.

It’s possible that other insurers may be interested in Centene, though Cigna is likely the most logical acquirer given that it has fewer overlaps that may be problems for antitrust regulators, according to the report.

UnitedHealth (NYSE:UNH)‘s planned purchase of Change Healthcare (NASDAQ:CHNG) has seen scrutiny from antitrust regulators and earlier this week U.S. Dept. of Justice antitrust chief Jonathan Kanter said he believes that mergers should be blocked if the regulator finds they lessen competition rather than finding a remedy to salvage a deal.

Recall Centene has been targeted by activists in the past. In 2019 Dan Loeb’s Third Point and activists Corvex and Sachem Head reportedly encouraged the company to sell itself before consummating its WellCare acquisition.

Cigna is scheduled to release Q4 results next Thursday.


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