Rumors of Aetna, Cigna Deal: The Story of a Non-Dismissive CEO (AET) (CI)
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Aetna (NYSE: AET) could be in the works for a major acquisition.
According to reports Friday, Cigna (NYSE: CI) Chief Executive David Cordani answered a question regarding a possible combination with Aetna -- as opposed to blowing it off like most executives would tend to do. At a recent Bernstein conference, Cordani said there are similarities between the two companies and the possible "economies of scale" of a combination.
Cordani then came back to his senses, and stated Cigna already has the means to increase shareholder value on its own.
Still, the comments have sent the rumor mills a-churning.
A combination would create the second-largest health plan provider in the U.S. Cigna and Aetna are currently number four and three, respectively, trailing behind WellPoint (NYSE: WLP) and UnitedHealth (NYSE: UNH).
An analyst from Barclays pointed out takeover premiums in the industry average around 15 to 20 percent. Cigna shares made a tremendous surge Thursday, but a lot of upside is still left in the stock if the average premium is warranted.
Shares are currently trading 1.7 percent better early Friday, while Aetna is modestly higher.
According to reports Friday, Cigna (NYSE: CI) Chief Executive David Cordani answered a question regarding a possible combination with Aetna -- as opposed to blowing it off like most executives would tend to do. At a recent Bernstein conference, Cordani said there are similarities between the two companies and the possible "economies of scale" of a combination.
Cordani then came back to his senses, and stated Cigna already has the means to increase shareholder value on its own.
Still, the comments have sent the rumor mills a-churning.
A combination would create the second-largest health plan provider in the U.S. Cigna and Aetna are currently number four and three, respectively, trailing behind WellPoint (NYSE: WLP) and UnitedHealth (NYSE: UNH).
An analyst from Barclays pointed out takeover premiums in the industry average around 15 to 20 percent. Cigna shares made a tremendous surge Thursday, but a lot of upside is still left in the stock if the average premium is warranted.
Shares are currently trading 1.7 percent better early Friday, while Aetna is modestly higher.
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