WELLPOINT, ING CO-BID FOR AETNA.Byline: Chris Sieroty Staff Writer THOUSAND OAKS Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. - WellPoint Health Networks Inc. and ING America Insurance Holdings want to acquire troubled health insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. Aetna in a cash and stock deal worth $10 billion, officials said Wednesday. Thousand Oaks-based WellPoint and ING expressed a ``desire to begin discussions'' about the acquisition of Hartford, Conn.-based Aetna in a letter dated Feb. 24. ``WellPoint's merger and acquisition strategy is to identify opportunities where WellPoint can enhance value for customers and stockholders,'' Leonard D. Schaeffer, WellPoint's chairman and chief executive officer, said in a statement released late Wednesday. ``Our approach in evaluating this situation will be consistent with our strategy.'' The letter to Aetna said ING and WellPoint would pay Aetna shareholders approximately $70 per share, or $44 in cash and $26 in WellPoint common stock for each share of Aetna. WellPoint is the nation's fifth-largest health maintenance organization and was headquartered in Woodland Hills until it moved its executive offices to Thousand Oaks last year. Its health care divisions include Blue Cross of California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). . ING, based in Amsterdam, is a global financial institution that is active in banking, insurance and asset management in more than 65 countries. John Rex Disambiguation: For John Rex (1771-1839), the initial benefactor of Rex Hospital, see Rex Hospital. John Rex is a British sociologist born in Port Elizabeth (South Africa) in 1925. , an analyst with Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , said WellPoint and ING are probably interested in dividing Aetna. ``It's my assumption that WellPoint would want the health care aspects, and ING would want the financial aspects of Aetna,'' Rex said. Aetna said Wednesday that it will review the offer as part of an overall review of its strategy and operations, spokeswoman Joyce Oberdorf said in a statement. Said Rex, ``It's good news for Aetna shareholders; it puts the company in play. I wouldn't be surprised if there were other offers.'' Word of the potential deal came just before the markets closed. Aetna shares closed at $53.06, up 29.03 percent, or $11.93, with most of the increase coming after Aetna's announcement. WellPoint shares declined 13 cents to $23.44 and ING's U.S. shares were up 25 cents to $51.81. Aetna's stock had declined more than 50 percent from a high of $99.88 last May due to high medical costs and controversy over its policies toward patients. Last fall, the company was hit by several class-action lawsuits filed by the same attorneys who won large awards against the tobacco companies. The lawsuits allege To state, recite, assert, or charge the existence of particular facts in a Pleading or an indictment; to make an allegation. allege v. , among other things, that its system for paying doctors rewards them for skimping 'skimping' Managed care The delaying or denial of services to members of a prepaid or 'capped' health plan, to control costs–because the monies received by the health plan remain constant, providing 'extra' services is more costly to the plan. See Skimming, Capitation. on patient care. Aetna has also had difficulty in turning around Prudential Prudential is the name of two different companies and buildings named after them: Companies:
The WellPoint-ING offer was received the day before Aetna removed its chief executive officer, Richard L. Huber, and replaced him with William H. Donaldson. Donaldson, 68, has been a board member since 1977 and is co-founder of the investment banking firm Donaldson, Lufkin & Jenrette. News of WellPoint's interest in Aetna surfaced on the same day the company said it had completed a $200 million acquisition of Prudential Health Plans of Chicago. The Chicago-based company was co-owned by Rush Presbyterian-St. Luke's Medical Center and The Prudential Insurance Co. The deal brings together Rush Prudential and WellPoint's existing Unicare business in Illinois. The Rush Prudential companies will now be operated under the Unicare brand and will offer both PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there and HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, products. ``We are very excited to close this deal,'' John Cygul, a spokesman for WellPoint, said before news of the offer for Aetna was disclosed. ``It is such a strong operation, in one of our strategic locations.'' The acquisition means WellPoint doubles its current medical membership in Illinois to almost 600,000, said Rex. ``I think it's a nice fold-in with their strategy of 'densifying' their markets,'' added Rex. ``WellPoint can expect to see some help to the bottom line from the deal next year. As for this year, the deal will have a neutral impact on earnings.'' WellPoint serves 7.3 million medical members and nearly 32 million specialty members nationwide through Blue Cross of California in California and Unicare throughout other parts of the country. The Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. contributed to this story. |
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