Humana shut down speculation that it intends to purchase Centene in a document filed with the Securities and Exchange Commission Monday.
In the filing, Humana said it doesn’t usually comment on rumored mergers, but amid “significant investor speculation and persistent market rumors” it decided to weigh in.
Humana “has chosen to make a one-time, limited exception to its no-comment policy (which continues in effect) and confirm that the company will not make a proposal to combine with Centene as an alternative to Centene’s proposed transaction with WellCare Health Plans,” it wrote in the document.
Humana said it will have no further comment on the matter.
That Humana may be interested in acquiring Centene was first reported by Reuters last month. The outlet reported that hedge funds invested in Centene may oppose the WellCare deal in hopes that it would investigate other, potentially more beneficial deals, including a Humana acquisition.
At the time, sources told Reuters that it was unclear whether the representatives from the hedge funds would actively seek to push shareholders to oppose the Centene-WellCare deal.
As it stands, the Centene-WellCare merger will create one of the largest players in government-sponsored insurance in the country. The $17.3 billion deal includes 22 million members in all 50 states and would form the largest sponsor of Medicaid managed care and Affordable Care Act exchange plans nationwide.
If Humana were to acquire Centene, it would add to its Medicare Advantage portfolio in addition to expanding into Medicaid managed care. That hypothetical deal would also likely face less antitrust scrutiny, as Humana’s business overlaps less with Centene’s than WellCare’s does.
Centene stocks tumbled Monday following Humana’s statement. As of about 10:30 a.m., shares were trading at nearly 10% below the opening price.