Notable Mergers and Acquisitions of the Day 7/21: UNH/HNT, RIMM/NT, VNR
- UnitedHealthcare, a UnitedHealth Group (NYSE: UNH), and Health Net, Inc. (NYSE: HNT) today announced that UnitedHealthcare has agreed to acquire Health Net of the Northeast's licensed subsidiaries and will work with Health Net to renew the customers currently enrolled in those plans with UnitedHealthcare as those customers reach their annual renewal dates. The transaction, subject to regulatory approvals and other closing conditions, is expected to close within 12 months.
"We assessed several alternatives for our Northeast health plans. We concluded that a transaction with UnitedHealthcare is in the best interest of our members. UnitedHealthcare has national scale, strong local relationships, and a very broad range of products," Mr. Gellert added.
After closing, UnitedHealthcare and Health Net will work together so that members and health care professionals have full continuity of their coverage and payments during the time that the Health Net benefit policies remain in force under the existing Health Net contracts.
UnitedHealthcare will acquire Health Net's Northeast insurance and HMO entities in Connecticut, New York and New Jersey, which have approximately $450 million in tangible net equity. UnitedHealthcare will also acquire membership renewal rights for the Health Net Life health care business in the Northeast.
The deal is being valued at $290 million.
- Research In Motion (NASDAQ: RIMM) disclosed that it has effectively been prevented from submitting an offer for the Nortel Networks (NYSE: NT) Wireless Business that is the subject of a bankruptcy auction scheduled to occur on July 24, 2009. The assets being sold are Nortel's CDMA and Long Term Evolution Access businesses. In its CDMA and Long Term Evolution Access businesses, Nortel develops current and next generation technology for wireless infrastructure and mobile devices.
RIM sought to be qualified as a qualified bidder in Nortel's auction bidding process for the Wireless Business, but RIM was told it could be qualified only if it promised not to submit offers for other Nortel assets for a period of one year. In seeking to impose this condition, Nortel and its advisors were fully aware of RIM's desire to purchase other Nortel assets as part of a solution to retain key portions of Nortel's business under Canadian ownership.
Despite repeated efforts, Nortel, its advisors and its court-appointed monitor have rejected RIM's repeated attempts to engage in meaningful discussions. Based on its preliminary review, RIM would be prepared to pay in the range of US $1.1 billion, subject to due diligence and the entering into of appropriate ancillary agreements, for the CDMA and Long Term Evolution Access businesses and certain other Nortel assets. RIM believes that such an offer would result in an extremely attractive price for Nortel creditors and value substantially in excess of the stalking horse bid made by Nokia Siemens Networks.
- Vanguard Natural Resources, LLC (NYSE: VNR) announced it has entered into an agreement to acquire producing oil and natural gas properties in South Texas for $52.25 million from an affiliate of Lewis Energy Group, L.P..
The properties to be acquired have total estimated proved reserves of 27 Bcfe as of July 1, 2009, of which 94% is natural gas and 74% is proved developed. Lewis will operate all of the wells acquired in this transaction. Based on the current net daily production of approximately 5,000 Mcfe, the properties have a reserve to production ratio of approximately 15 years.
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