Day: July 19, 2016

DOJ REPORTEDLY SET TO BLOCK $37B HUMANA-AETNA MERGER; OPPOSITION COULD BE DEAL’S DEATH KNELL; HUMANA STOCK DIVES 4%; ANTHEM-CIGNA ALSO SAID IN DOUBT

Humana vs. Aetna July 19
The downside risk of a failed deal is greater for Humana than for Aetna, as reflected in this Google Finance chart showing the path of their stocks since opposition first surfaced; Humana is in blue, Aetna in red.

The Justice Department’s final decision on whether to sue to block Aetna’s $37 billion acquisition of Louisville-based Humana could come this week or next, Bloomberg News and other media outlets are now reporting; latest news developments at 4:50 p.m.

The DOJ’s move would represent strong government pushback against consolidation in the health-insurance industry, according to The Wall Street Journal.

Humana building
Humana headquarters.

The companies could settle a lawsuit before or after one is filed in order to save the deal, according to Bloomberg, perhaps by shedding even more assets than they’ve already offered.

Hartford-based Aetna and Humana will probably fight any lawsuit in court, while Anthem and Cigna are less likely to litigate against the government, Ana Gupte, an analyst at Leerink Partners, told Bloomberg.

The DOJ’s antitrust division is also preparing a suit to block a similar merger between Anthem and Cigna.

Shares of Humana and Aetna fell sharply on the news. At the close of trading, Humana tumbled 3.9%, or $6.26, to $153.38. Aetna fell 2.7%, or $3.21, to $115.15. Earlier in the day, Humana traded as low as $150 — lowest since it hit $148 in February 2015, according to Google Finance.

An Aetna spokesman told The Wall Street Journal it “doesn’t comment on rumors and speculation, but we are steadfast in our belief that this deal is good for consumers and the health-care system as a whole.” Humana spokesman Tom Noland did not immediately respond to a Courier-Journal request for comment.

Justice Department officials are concerned the deals, which would transform the health-insurance industry by turning its five biggest companies into three, would harm customers, according to several people familiar with the situation cited by Bloomberg. “While the companies may offer to sell assets to gain approval for the deals, that’s unlikely to sway antitrust officials, one of the people said,” according to the news service.

Hints of trouble ahead

The DOJ’s opposition isn’t entirely surprising. Less than two weeks ago, Continue reading “DOJ REPORTEDLY SET TO BLOCK $37B HUMANA-AETNA MERGER; OPPOSITION COULD BE DEAL’S DEATH KNELL; HUMANA STOCK DIVES 4%; ANTHEM-CIGNA ALSO SAID IN DOUBT”

Courier-Journal owner Gannett Co. says it isn’t imposing an editorial agenda on the Louisville newspaper

Gannett Co. is increasingly coordinating news coverage between The Courier-Journal and its approximately 100 other daily newspapers via what it calls the USA Today Network. But the company’s chief content officer — equivalent to a super-editor — tells Nieman Lab it isn’t imposing a top-down editorial agenda.

Joanne Lipman
Lipman

“A really important part of the network is empowering journalists in any newsroom to come up with an idea,” says Joanne Lipman, a former Wall Street Journal editor who’s been leading the network since January. “We can support them on any idea that they might have.” She offered an example:

“A reporter at one of our smaller properties in Florida came up with a really Continue reading “Courier-Journal owner Gannett Co. says it isn’t imposing an editorial agenda on the Louisville newspaper”

In Ky., corporations are now allowed to make contributions to campaigns through PACs, leveling the field with unions

Gregory Van Tatenhove
Tatenhove

The shift comes amid the ongoing fight over so-called right-to-work policies, according to a new WFPL story. “Until last week,” correspondent Ryland Barton says, “unions (usually anti-right-to-work) were allowed to make donations to candidates and political action committees, while corporations that support right-to-work were barred from doing so.”

Corporations and unions will now be allowed to donate to political action committees, but not directly to candidates. The change came after the Florida non-profit Protect My Check filed a lawsuit in U.S. District Court arguing that state law unfairly favored unions. Judge Gregory Van Tatenhove largely sided with the non-profit March 31.

Greg Creed
Creed

“I think George Hamilton, as the new Colonel behind Extra Crispy is brilliant and that is having a positive impact on our sales momentum at KFC in the U.S.”

— Yum CEO Greg Creed, in a second-quarter earnings teleconference with Wall Street analysts last week. The perpetually tanned Hamilton debuted a month ago as the latest in a series of KFC Founder Harland Sanders impersonators. Here’s one of the spots:

Ind. Kindred exec accused of child molestation found dead; layoffs hit Deutsch ad agency that lost Pizza Hut account; GE Firstbuild’s cold-brew coffee maker set for 2017 release

A news summary focused on 10 big employers; updated 7:42 p.m.

KINDRED: The Johnson County Sheriff’s Office says Kindred Greenwood hospital CFO William Brenner was found dead inside his home near Indianapolis yesterday, 10 days after authorities accused him of molesting a 6-year-old boy he was fostering in 2014 and 2015.

William Brenner
Brenner

Police say there was no evidence of a struggle and no weapons were found near the body. Investigators believe he may have had a medical episode and had died several days earlier. His body was found in a hallway and was badly decomposed (WIBC).

Brenner, 49, faced four counts of felony child molesting and one count of felony dissemination of matter harmful to minors, according to the Indianapolis Star. The Greenwood facility is one of Louisville-based Kindred’s 95 transitional care and rehabilitation hospitals. Greenwood is 12 miles south of Indianapolis.

Also today, Kindred said it would release its second-quarter financial results on Aug. 4 after stock markets close. The following day, it will host a teleconference with Wall Street analysts to discuss the report (press release).

In downtown Louisville, construction is picking up at Kindred’s new headquarters expansion at Broadway and Fourth streets after a relatively slow start. The $36 million project financed with substantial public incentives will add 142,000 square feet and around 500 new jobs. Plans also include around 7,000 square feet of restaurant space (Broken Sidewalk).

PIZZA HUT: Advertising agency Deutsch went through a round of layoffs at its Los Angeles office last week directly related to the loss of the Pizza Hut account last spring. A Deutsch spokesperson would say only that less than 2% of the L.A.-based team had been affected. Deutsch won the struggling Yum unit’s account two years ago and went on to create the agency’s debut campaign (which essentially said, “We’re Italian”); video, top. Last December, the pizza chain started shopping the account, eventually choosing the independent Droga5 agency in May — its fifth agency of record in six years. Multiple sources have told Adweek that Pizza Hut is not the world’s most agreeable client. It’s not yet clear when Droga5’s first work for the chain will appear (Adweek).

Prisma
Prisma.

GE: A cold-brew coffeemaker developed by GE Appliances’ Firstbuild laboratory in Louisville is scheduled to reach the market next summer, after first passing through a crowdfunding round on IndieGoGo. The lab is using unconventional funding for the coffee maker, called Prisma, not so much as a financial requirement as it is an awareness-raising launchpad. “We believe crowdfunding is a great way to validate products with the early adopter community,” Firstbuild Senior Design Engineer Justin Brown told Daily Coffee News. The Prisma can make anywhere from five to 25 ounces of ready-to-drink cold coffee (Daily Coffee News).

AMAZON has reportedly fired one of its delivery men Continue reading “Ind. Kindred exec accused of child molestation found dead; layoffs hit Deutsch ad agency that lost Pizza Hut account; GE Firstbuild’s cold-brew coffee maker set for 2017 release”

Pizza Hut restaurants and a deliveryman robbed at gunpoint in Kansas, Illinois and Florida

The latest crime news across the world of 48,000 restaurants*.

Crime scene tapeIn Kansas, Wichita police are searching for the suspect in a $1,500 armed robbery at a Pizza Hut late Sunday night. Employees at the restaurant, ages 21, 20 and 19, told officers a man entered the store, pointed a gun at all three of them, and demanded money, according to KAKE.

In Freeport, Ill., two masked men struck a Pizza Hut delivery man with a pistol Friday night before stealing his two pizzas and 24 wings, according to authorities. The delivery man was approaching a home when he was grabbed from behind. Two masked men pointed a pistol at him and struck him before taking off with the order, according to the Journal Standard.

In south Florida, Broward County deputies are searching for a man suspected of robbing a Pizza Hut earlier this month in Deerfield Beach. Deputies said the man placed an order July 8 around 11 p.m., then pulled out a gun once the register was open. He reached over the counter, grabbed cash out of the register and ran away, deputies told the Sun Sentinel.

Three days later, the suspected bandit and an accomplice robbed a Family Dollar store at gunpoint, a theft that was caught on a surveillance camera.

* Yum has 43,000 KFCs, Pizza Huts and Taco Bells in nearly 140 countries; Papa John’s has 4,900 in 37 countries, and Texas Roadhouse has 485 restaurants in five countries. With that many locations, crimes inevitably will occur — with potentially serious legal consequences for the companies.