Robbins Arroyo LLP: Acquisition of Humana Inc. (HUM) by Aetna Inc. (AET) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Humana Inc. (NYSE: HUM) by Aetna Inc. (NYSE: AET). On July 3, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Aetna will acquire Humana. Under the terms of the agreement, Humana shareholders will receive $125.00 in cash and 0.8375 Aetna common shares for a total consideration of $230.11 for each share of Humana common stock.
Is the Proposed Acquisition Best for Humana and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Humana is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $230.11 merger consideration represents a premium of only 14.4% based on Humana’s average closing price over the past month. This premium is significantly below the average one month premium of nearly 23.43% for comparable transactions within the past five years.
On April 29, 2015, Humana reported strong earnings results for its first quarter 2015. Pretax income was $744 million, an increase of 8.5% over the previous year, primarily due to improved year-over-year results in each of the Company’s business segments. Adjusted EPS guidance for 2015 of $8.50 to $9.00 was reaffirmed, representing a growth rate of approximately 17% from 2014 Adjusted EPS. In commenting on these results, Humana President and Chief Executive Officer Bruce D. Broussard remarked, “Our first-quarter achievements included substantial revenue and membership growth, announcement of the launch of our population health technology business, Transcend Insights, the pending sale of Concentra, and the completion of our accelerated share repurchase program, as well as strong pretax income. These achievements contributed meaningfully to the advancement of our integrated care delivery model with its data-driven focus on the consumer, powered by our disciplined approach to capital allocation – which, taken together, represents a sustainable competitive advantage for Humana.”
In light of these facts, Robbins Arroyo LLP is examining Humana’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Humana shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Humana shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.