=WellCare (WCG) to be acquired by Centene (CNC) for $305.39/share

WellCare to be acquired by Centene (CNC) in cash and stock transaction for roughly $305.39/share, or a total enterprise value of $17.3 bln

Centene is spending more than $15 billion on rival WellCare to dive deeper into government-funded health coverage in the same week that President Donald Trump's administration renewed its attack on the Affordable Care Act.

The insurer said Wednesday that its cash-and-stock deal to buy WellCare will create an insurer that manages Medicaid coverage for more than 12 million people and covers several million more in the federal government's Medicare program for people age 65 and older.

The deal comes after the administration attacked the ACA in court Monday, saying that former President Barack Obama's health care law should be declared unconstitutional after Congress repealed one part of it — unpopular fines on people who remain uninsured. The 2010 Affordable Care Act expanded coverage to millions of people by creating individual insurance exchanges and increasing Medicaid enrollment in several states.

Centene Corp., based in St. Louis, has built its business around Medicaid, the state and federally funded program for people who are poor or disabled, and also has expanded aggressively on the exchanges.

The Wellcare deal could help Centene improve its profitability and protect against any risks that stem from threats to the ACA, SVB Leerink analyst Ana Gupte said in a research note.

Several GOP-led states are challenging the ACA in a federal court case that may head to the Supreme Court, and the Justice Department filed a letter with a federal appeals court in New Orleans supporting their case.

A Centene tie up with WellCare Health Plans Inc., based in Tampa, Florida, would create one of the biggest insurers in the country with 22 million customers and a dominating Medicaid presence in several states.

The transaction includes more than three shares of Centene stock and $120 in cash for each share of WellCare stock, or $305.39 per WellCare share. That's about a 32 percent premium to WellCare's Tuesday closing stock price. The companies put the deal's value at $17.3 billion.

Centene Corp. shareholders will own about 71 percent of the business, with WellCare shareholders owning approximately 29 percent.

The board of the combined company will have 11 members, with nine from Centene's board and two from WellCare's board. Centene Chairman and CEO Michael Neidorff will serve in those roles after the combination.

The new company will be based in St. Louis. The deal is expected to close in the first half of 2020, but it still needs approval from Centene and WellCare shareholders, as well as regulators.

Shares of WellCare jumped nearly 13 percent in pre-market trading Wednesday, while Centene fell almost 5 percent.

=WellCare (WCG) to acquire Aetna's (AET) Medicare Part D prescription business

WellCare to acquire Aetna's (AET) entire standalone Medicare Part D prescription drug plan business 

The business to be divested had an aggregate of approximately 2.2 million members at June 30, 2018. The Divestiture does not affect Aetna's individual or group Medicare Advantage, Medicare Advantage Part D or Medicare Supplement products or plans. Aetna will provide administrative services to, and retain the financial results of, the divested business through 2019. The purchase price is not material to Aetna. Closing of the Divestiture is subject to the closing of CVS Health Corporation's (CVS) proposed acquisition of Aetna, regulatory approvals and other customary closing conditions.

• Aetna believes the Divestiture is a significant step toward completing the DOJ's review of the CVS Health Transaction. Aetna and CVS Health continue to engage in productive discussions with the DOJ. Aetna's expectations regarding the timing of the closing of the CVS Health Transaction remain unchanged.

=WellCare (WCG) reported earnings on Tue 2 Aug 2016 (b/o)

WellCare beats by $0.83, beats on revs; raises FY16 EPS above consensus  :

• Reports Q2 (Jun) earnings of $2.23 per share, excluding non-recurring items, $0.83 better than the Capital IQ Consensus of $1.40; revenues rose 3.2% year/year to $3.59 bln vs the $3.51 bln Capital IQ Consensus.
• Co issues raised guidance for FY16, sees EPS of $4.95-5.05 from $4.55-4.70 vs. $4.64 Capital IQ Consensus Estimate. Co sees adjusted premium revenue of $13.65-13.875 bln versus prior guidance of $13.5-13.82 bln.
• Membership in the company's Medicare PDP segment decreased 33,000, or 3.2 percent year over year, to ~1.0 mln members as of June 30, 2016. Membership declined 13,000, or 1.3 percent, compared with March 31, 2016.