Centene shoots down rumors that it's bidding for assets from larger companies
The head of St. Louis-based Centene is shooting down speculation it will bid on any units being unloaded by larger companies that are considering a merger. There have been reports the St. Louis-based health insurer is interested in trying to acquire units that would have to be divested by the potential combinations of Aetna and Humana or Anthem and Cigna.
"Any one thing that Centene is recognized for is that its has not participated and will not participate in bidding at auctions," Centene Chief Executive Officer Micheal Neidorff told analysts Tuesday during a quarterly conference call.
"So, anything that indicates that would have to be considered a rumor."
One of the reports came from Bloomberg earlier this month. The news service claimed Centene put forth an offer for units Aetna would have to unload to gain regulatory approval for a proposed merger with Humana.
"What we see out of,uh, the Humanas and others are businesses that are at a higher-level that we do not have a network for," Neidforff said.
"And that's not our business and we're not building a network for it."
His comments came on the same day Centene beat analysts expectations for its quarterly earnings.
The health insurer, which focuses on Medicaid plans, reported a profit of roughly $170 million, compared to $88 million for the same period a year earlier.
Lower medical costs and a boost from the recently-completed Health Net acquisition helped drive earnings.
But a potential $300 million hit for a probable loss on unearned premiums related to the $6.3 billion deal, which closed in March, has grabbed the attention of analysts. The company revealed the premium deficiency reserve was revealed during the analyst call.
That sent Centene stock down about 10 percent in afternoon trading.