Tag: Deals

Latest Headlines July 19, 2016July 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.

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” →

Latest Headlines July 18, 2016July 21, 2016

Ford shuffles top execs in Europe and South America, adds CFO to new mobility unit; Humana-Aetna said ready to shed 350,000 members to win DOJ antitrust clearance

A news summary focused on 10 big employers; updated 2:12 p.m.

FORD today shifted senior leadership in Europe and South America, and promoted an executive to the nascent Ford Smart Mobility LLC subsidiary. The changes come as the European market has been further challenged by Britain’s decision this month to leave the E.U., at a time when the economy is already threatened by a possible recession.

Neil Schloss, 57, was named CFO at the mobility unit, in addition to his current position as Ford vice president and treasurer.

The leadership changes started with the retirement of one of the automaker’s more senior female executives, Barb Samardzich, 57, vice president and COO of Ford of Europe, effective Oct. 1. The company said her retirement is voluntary.

Her retirement spurred a cascade of other changes:

Steven Armstrong, 52, succeeds Samardzich, and
Lyle Watters, 51, succeeds Armstrong, and was elected a corporate officer

Samardzich, during her 26-year Ford career, was responsible for the design, engineering and development of several key Ford and Lincoln vehicles, including the 2005 model Mustang.

Ford announced the mobility subsidiary in March amid growing competition with other automakers and Silicon Valley in development of driverless cars and other technology innovations that are challenging Detroit’s primacy in the auto world. Underscoring its importance, Ford said Jim Hackett, former Steelcase vice chairman and CEO, was leaving the company’s board of directors to chair the new subsidiary.

Separately today, Ford also highlighted the towing capacity of its 2017 F-Series Super Duty trucks, starting with high-strength, military-grade, aluminum alloy and high-strength steel that helps cut weight by up to 350 pounds.

The F-450 Super Duty SuperCrew 4×4 now features a maximum gooseneck tow rating of 32,500 lbs., 1,290 lbs. more than its nearest competitor, a regular cab two-door pickup. Maximum fifth-wheel towing has been boosted to 27,500 lbs., 2,500 lbs. better than the nearest competitor (press release). In Louisville, the Kentucky Truck Plant employs about 5,100 workers, producing F-250 and F-550 Super Duty pickups, plus Expeditions, and Lincoln Navigators.

HUMANA and proposed acquirer Aetna have reportedly offered to divest regional plans covering roughly 350,000 members, and have received bids from smaller Medicare rivals WellCare Health and Centene, as the two insurance giants scramble to win Department of Justice approval for their $37 billion tie-up.

Analysts say the DOJ’s antitrust unit may not see the sales alone as enough to maintain competition. “The question is not can you find a buyer for the plans,” said FBR Capital Markets analyst Steven Harper, “but will the government approve the buyer?” (CNBC).

The 350,000 members Humana and Aetna are reportedly willing to shed are a tiny fraction of the 60 million members the two would have if their deal went through. But its prospects grew more uncertain when word leaked July 7 that the DOJ had called in executives at both companies to explain why it wouldn’t be anticompetitive.

Humana, started in Louisville in 1961, has more than 21.3 million members and does business in all 50 states. It has approximately 50,000 employees, including about 12,500 in Louisville. Last year’s revenues were $54 billion.

UPS said it announce second-quarter results July 29 at about 7:45 a.m. ET, followed by a conference call at 8:30 with CEO David Abney, CFO Richard Peretz and Wall Street analysts. The call will be open to the public on a listen-only basis, via a live webcast (press release).

In other news, a Fresh Thyme Farmers Market — the city’s second — will be an anchor tenant in the planned Bardstown Pavilion commercial center in Fern Creek, a $35 million-$40 million project under review by metro planners (Courier-Journal). Fresh Thyme opened its first store in April on Shelbyville Road in St. Matthews in a former Liquor Barn store. The Fern Creek outlet would be one of 60 stores the Chicago-based chain plans by 2019.

In NuLu, construction on the proposed $37 million AC Hotel at the corner of Shelby and Market streets could start in October or November of this year (Insider Louisville).

Philanthropy July 15, 2016July 21, 2016

Fund for the Arts raises $9 million, but campaign illustrates risk of shifting Louisville economy

The Fund for the Arts said it received $8.7 million in contributions during its fundraising campaign ended last month, up slightly from last year’s $8.6 million. The money will be distributed to more than 100 charities, schools and other nonprofits to support arts programs, according to The Courier-Journal.

But in announcing the figures, the 67-year-old organization warned Louisville’s economy has made it harder to raise more money, especially when big contributions from companies such as GE Appliances and Humana may be threatened by ownership changes.

The Humana Foundation is one of the fund’s biggest supporters. Of the $8.3 million it gave to charity in 2014, $366,000 went to the arts fund, according to the foundation’s most recent IRS tax return. Only six other charities got more:

KaBOOM! of Washington, D.C.: $1 million
University of Louisville Foundation: $905,000
Scholarship America of Minneapolis: $730,000
Metro United Way: $707,000
Actors Theatre: $703,000
David Toms Charitable Foundation of Shreveport, La.: $500,000

With $179 million, the Humana Foundation is the fourth-largest foundation in Louisville, according to Boulevard’s database of richest nonprofits. While it’s legally separate from the company, their leadership overlaps. The foundation’s five directors are Humana CEO Bruce Broussard; General Counsel Christopher Todoroff; board member David A. Jones Jr.; his father, company co-founder David A. Jones Sr., and Chairman Michael McCallister, a retired Humana CEO and former chairman.

It’s unclear whether Aetna would change any of those officers — and the foundation’s giving, too — assuming the Hartford insurer completes its $37 billion purchase of Humana. That deal is subject to final regulatory approval, a hurdle that’s recently grown higher within the Department of Justice’s antitrust division.

Related: As GE Foundation gets new chief, its Louisville ties are less certain after Haier deal.

Latest Headlines July 13, 2016July 13, 2016

Humana stock jumps for second day; Amazon Prime Day sales soared, and yuck: Man chases Jack with bottle of Elmer’s glue

A news summary, focused on 10 big employers; updated 4:38 p.m.

Ford 2017 Escape — The 2017 Ford Escape built in Louisville took top honors in Cars.com’s annual compact SUV challenge.

HUMANA‘s stock closed moments ago up 4.3% at $161.30, posting its second consecutive day of gains. The beleaguered stock has been buffeted since last week’s surprising news that top executives met Department of Justice anti-trust officials in a last-ditch effort to keep the insurer’ $37 billion merger with Aetna on track (Google Finance).

The New York state insurance regulator has conditionally approved the deal, one of the last state sign-offs needed, people familiar with the matter told Bloomberg News. The approval is significant because New York is one of the nation’s biggest insurance markets. Alongside the Justice Department, state insurance regulators have been conducting their own assessments, which are in some cases required before a transaction can proceed (Bloomberg).

The Louisville insurer is adding 70 telesales jobs to its existing 305 in Middleton, Wisc., to meet anticipated demand for the upcoming Medicare open enrollment period, Oct. 15 to Dec. 7 (Wisconsin State Journal).

KINDRED: Arkansas state lawmakers are giving mixed reviews to the state’s plan to sell its in-home health care services program to Kindred for $39 million, a deal closing Aug 1. Kindred submitted the highest bid of the six bidders and got the highest scores in the state Health Department’s bid evaluation (Arkansas Democrat-Gazette).

UPS fired an employee at its Maumee distribution center yesterday after investigating a photo posted on Facebook purporting to show a noose hanging inside the northeast Ohio facility. It’s unclear whether the employee taking the photo was fired, or the person responsible for the noose itself. Maumee is 18 miles southwest of Toledo (Toledo Blade).

AMAZON said yesterday’s second annual Prime Day Continue reading “Humana stock jumps for second day; Amazon Prime Day sales soared, and yuck: Man chases Jack with bottle of Elmer’s glue” →

Latest Headlines July 12, 2016July 23, 2016

Taco Bell to open flagship Cantina on Las Vegas Strip; Pizza Hut launches a chatbot ordering system; and Humana stock edges higher, breaking downward spiral

A news summary, focused on 10 big employers; updated 5:34 p.m.

Taco_Bell_Las_Vegas_Flagship_Restaurant — Artist’s rendering shows new two-story Las Vegas restaurant.

TACO BELL this afternoon announced plans to build a two-story 24-hour flagship Cantina in Las Vegas right on the Strip at East Harmon Avenue, across from CityCenter and The Cosmopolitan Hotel; it’s expected to open this fall and will be the third in the growing Cantina division. Like other Cantinas, the Las Vegas restaurant will serve alcohol, including beer and Twisted Freezes slushies. Taco Bell introduced the Cantina concept last year with two urban locations, in a bid to draw younger diners with a more tech-focused ordering system and design. Of the 2,000 Taco Bell restaurants planned to be built by 2022, 200 will be urban locations, a typically underrepresented geography for the brand (press release).

Cantina debuted in Chicago last September, and a San Francisco outpost followed a few weeks later. After Las Vegas, Taco Bell plans to take the concept to Atlanta, and further expansion is in the works for college towns and dense urban areas across the country (Eater). Twisted Freezes come in three flavors: Taco Bell’s proprietary Mountain Dew Baja Blast (blue), Cantina Punch (red), and Margarita (green). Patrons can add their choice of rum, tequila or vodka (Chicago Eater).

PIZZA HUT announced a new artificial intelligence chatbot that works within Facebook Messenger, and on Twitter, part of a massive roll-out the company is calling “social media ordering.” Chief Digital Officer Baron Concors demonstrated the chatbot at MobileBeat 2016 during a session on chatbot innovations. The new bot can handle pizza and other food delivery orders from customers who have Pizza Hut accounts, streamlining the process, improving accuracy, and eliminating wait-times. It will be available starting next month (Venture Beat and press release).

HUMANA‘s stock closed moments ago at $154.65 a share, up less than 1% — still, the first up day since news broke last week that the insurer and Aetna of Hartford were struggling to keep their $37 billion merger on track during an unexpected meeting with the Justice Department. Aetna’s stock fell less than 1%, closing at $115.50 (Google Finance). None of the parties in the DOJ negotiations Friday have publicly disclosed the outcome. Humana has 12,500 employees in Louisville.

AMAZON: Some shoppers encountered a glitch Continue reading “Taco Bell to open flagship Cantina on Las Vegas Strip; Pizza Hut launches a chatbot ordering system; and Humana stock edges higher, breaking downward spiral” →

Latest Headlines July 11, 2016July 11, 2016

Humana dives another 3% as investors watch DOJ fallout; and prison time for N.C. man who duped ad agencies over fake Brown-Forman contract

A news summary, focused on 10 big employers; updated 5:30 p.m.

AdWeek cover — Ad exec fraudster appears on trade weekly’s just-published cover this week.

HUMANA‘s shares fell another 2.6%, or $4.15, to close at $154, as investors watched developments at the Louisville company and proposed acquirer Aetna, after executives mounted an 11th-hour battle Friday before antitrust officials to save the companies’ $37 billion merger. Aetna’s shares closed down 0.5%, or 56 cents, to $116.44. Last week, Humana tumbled 11% and Aetna a smaller 2% after news first leaked about the Department of Justice talks on Thursday (Google Finance). The company’s charitable foundation today announced a $225,000 grant to the Louisville Urban League to launch “It Starts with Me.” The insurer’s employees will visit the California, Parkland, Russell and Shawnee neighborhoods, helping families get health insurance, connect participants with support resources and find after-school activities for children (WLKY). Based in Louisville, Humana employs 12,500 employees in the city.

BROWN-FORMAN: A former North Carolina advertising executive was sentenced to 57 to 81 months in prison for defrauding two ad agencies in a scheme where he faked a series of contracts in 2012 with Brown-Forman and Coca-Cola Co. supposedly worth $269.9 million. The man, Bill Grizack, went so far as to create email addresses with domains closely resembling addresses of actual Brown-Forman employees, and used “burner” cellphones for made-up conversations with the whiskey giant (AdWeek).

Former Brown-Forman public relations chief Rick Bubenhofer has opened a boutique public relations agency, RBPR, with offices in Louisville and New York (TR Business).

In Nashville, the distiller’s Jack Daniel’s unit later this month is opening its first branded retail store outside its corporate home in Lynchburg, Tenn. Called the Nashville General Store, the outlet will sell clothing to barware and custom-made musical instrument displays. But it won’t sell whiskey because the store would need a liquor license (Tennessean via USA Today).

The Filson Historical Society is nearing completion of a $12 million expansion and renovation project partly underwritten with nearly $600,000 in contributions from Brown-Forman’s founding Brown family. The project includes a new, 20,000-square-foot Owsley Brown II History Center honoring the late Brown-Forman CEO. Founded in 1884, Filson is devoted to Kentucky and Ohio River Valley history and culture (Courier-Journal). Here’s a drone’s eye view of the project:

AMAZON Prime members now make up more than half the online retailer’s customer base, according to a new study. Consumer Intelligence Research Partners estimates Amazon counts 63 million Prime members among its shoppers — an increase of 19 million from last June (Fortune). Amazon stock traded at a new intraday high of $755.90 before giving back some; shares closed at $753.78, up $7.97, or 1%. Investors are anticipating tomorrow’s second annual Prime Day super sale; the stock closed at $. The retailer’s stock has soared 70% from a year ago vs. a much smaller 2.8% gain in the S&P 500 index. The company employs a total 6,000 workers at distribution centers in Jeffersonville and Shepherdsville.

TEXAS ROADHOUSE‘s stock also traded intraday at a new record 52-week high, $46.83, but closed at $46.54, up $1.12, or 2.5%.

Hints of trouble ahead

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