Wells Fargo Downgrades HealthSpring (HS) to Market Perform; Valuation Call
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Price: $55.00 --0%
Rating Summary:
2 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo downgraded HealthSpring (NYSE: HS) from Outperform to Market Perform with a price target range of $53-$57.
Wells analyst says, "We are downgrading our rating on HealthSpring as we believe valuation is full following yesterday's (10/24) announcement. Cigna (NYSE: CI) announced that it has signed a definitive agreement to acquire HealthSpring, which provides Medicare Advantage and Part D health plans. The basis for our downgrade is valuation, as Cigna is paying $55 per share in cash for HealthSpring, which falls at the midpoint of our valuation range, and our view that another bidder is unlikely to emerge. While neither company directly noted if the deal had been shopped to other companies, HealthSpring's CEO, Herb Fritch did note that they had gone through a "pretty rigorous process and I think we're all pleased with the results." As a result, we do not expect another bidder to emerge. We see the break-up fee of $115 million as substantial and doubt the transaction would have any issues being approved by the various government regulators."
For more ratings news on HealthSpring click here and for the rating history of HealthSpring click here.
Shares of HealthSpring closed at $53.71 yesterday.
Wells analyst says, "We are downgrading our rating on HealthSpring as we believe valuation is full following yesterday's (10/24) announcement. Cigna (NYSE: CI) announced that it has signed a definitive agreement to acquire HealthSpring, which provides Medicare Advantage and Part D health plans. The basis for our downgrade is valuation, as Cigna is paying $55 per share in cash for HealthSpring, which falls at the midpoint of our valuation range, and our view that another bidder is unlikely to emerge. While neither company directly noted if the deal had been shopped to other companies, HealthSpring's CEO, Herb Fritch did note that they had gone through a "pretty rigorous process and I think we're all pleased with the results." As a result, we do not expect another bidder to emerge. We see the break-up fee of $115 million as substantial and doubt the transaction would have any issues being approved by the various government regulators."
For more ratings news on HealthSpring click here and for the rating history of HealthSpring click here.
Shares of HealthSpring closed at $53.71 yesterday.
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