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Humana enters quiet period until July 29, refueling acquisition rumors


In light of the recent speculations regarding a potential Humana acquisition, the insurer issued an 8-K filing Monday to relay that it will enter a quiet period because it's not "company policy to comment on rumors or speculation regarding possible merger activity."

Public companies aren't required to enter quiet periods, as the Wall Street Journal pointed out. But many companies cite securities laws as a reason for going silent the weeks leading up to the release of earnings reports. Humana stated that it will address 2015 earnings during its second quarter earnings conference call, scheduled for July 29.

Additionally, the Louisville-based insurer dropped out of a major healthcare conference, as Humana Chief Financial Officer Brian Kane was set to speak Wednesday at a Goldman Sachs global event in California. The move likely will refuel the rumor mill of a forthcoming deal, reported the Associated Press.

Now may be a better time than ever for market consolidation. Humana's Medicare business is strong and continues to grow steadily, with more than 3 million Medicare Advantage members, while the insurer also benefits from stable reimbursement levels, reported The Street.

What's more, deals have been on hold since 2011, partly due to the economy and partly due to the uncertainty surrounding the Affordable Care Act. Since implementation of the ACA, insurers have done what they can to remain competitive and woo the public as they eye one another in anticipation of takeovers in order to gain more customers, noted The Street.

After Humana's issued statement Monday, Leerink analyst Ana Gupte stated that merger talks most likely are going on, and that Aetna, Anthem and Cigna may all have an interest in Humana, noted the AP.

Humana's shares increased $2.30 to $216.84 following the filing. Aetna and Cigna shares climbed less than 1 percent, while Anthem shares fell slightly, according to the AP.

For more:
- here's the SEC filing
- read the WSJ article
- check out the AP story
- here's The Street piece

Related Articles:
How a Humana acquisition would reshape the market
Aetna poised to make an offer for Cigna, Humana
Humana still attractive acquisition target, but priced too high
Booming Medicare business could make Humana an acquisition target