'HCSC, Elevance Compete For Cigna Medicare Advantage Unit' - BNN Bloomberg
Portfolio Pulse from Benzinga Newsdesk
Health Care Service Corp. (HCSC) and Elevance Health Inc. (ELV) are in competition to acquire Cigna Group's (CI) Medicare Advantage business, which may be valued at over $3 billion. Final bids are expected next week. Cigna's Medicare Advantage segment, a smaller part of its overall business with fewer than 600,000 enrollees, is projected to incur losses this year and the next. The sale process is ongoing with no guarantee of a transaction, and other bidders may emerge. Previously, Cigna's merger talks with Humana Inc. failed, leading Cigna to plan a significant increase in stock buybacks.
December 15, 2023 | 4:20 pm
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NEUTRAL IMPACT
Cigna's Medicare Advantage business is up for sale, with HCSC and Elevance as potential buyers. The unit may sell for over $3 billion despite being unprofitable. Cigna plans significant stock buybacks following a failed merger with Humana.
The sale of Cigna's Medicare Advantage business could have a neutral to slightly positive impact on CI's stock price in the short term. The potential $3 billion inflow from the sale could be seen as positive, but the fact that the unit is unprofitable may temper investor enthusiasm. The planned increase in stock buybacks could support the stock price, but the overall impact is uncertain without knowing the final outcome of the sale.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 100
NEUTRAL IMPACT
Elevance Health Inc. is in the running to acquire Cigna's Medicare Advantage business. A successful bid could expand Elevance's market presence but also comes with an unprofitable unit.
Elevance Health's potential acquisition of Cigna's Medicare Advantage business could have a neutral impact on ELV's stock price in the short term. The acquisition could provide growth opportunities, but the reported unprofitability of the unit may raise concerns among investors. The final impact will depend on the acquisition terms and the company's strategy to turn around the unit's performance.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70