Aetna Sees Merger Approval, Despite Sector's Stock Decline
March 28, 2011
HARTFORD, Conn. -- Aetna Life & Casualty Co. believes that its shareholders will still approve its $8.13 billion purchase of U.S. Healthcare Inc. this week despite last week's rout of managed-health-care stocks. A majority of votes already have been submitted, and ``they are overwhelmingly in favor,'' Wilkins spokeswoman Joye Shortridge said. The transaction is scheduled to close Thursday following a vote by shareholders of both companies. The company doesn't expect many votes to change in light of the pummeling of industry stocks, prompted by bellwether managed-care concern United HealthCare Corp.'s disclosure that its second-quarter earnings would plummet. But some analysts believe the victory margin won't be as wide as Aetna would like. ``It's no secret that certain large shareholders are planning to rescind their votes because of the changes in the health-care environment,'' says Alida Woodard, an Oppenheimer & Co. analyst. To close the transaction, Aetna needs affirmative votes from two-thirds of its holders. Since Aetna signed the deal in early April, earnings forecasts for numerous managed-care companies have been lowered. Aetna and U.S. Healthcare are not among those companies that have announced worse-than-expected earnings. Originally, Aetna's cash-and-stock purchase of U.S. Healthcare was valued at about $8.9 billion, but has fallen as Aetna's stock declined from $75.50 just before the deal was announced. Amid a broad sell-off in the market Monday Aetna shares slipped $2 to $60.875 in New York Stock Exchange composite trading. U.S. Healthcare fell $1 to $50.25 in Nasdaq Stock Market trading.
