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Daniel Loeb’s Third Point has built a stake in Centene as the health insurer works to complete its previously announced purchase of WellCare Health Plans.
While the activist hedge fund confirmed on Friday that it has a financial position in Centene, neither the reason for its involvement nor the size of the stake could be immediately determined by CNBC.
The Wall Street Journal reported earlier in the day that Loeb and his partners at Third Point want the company to consider selling itself before shelling out $15.3 billion on WellCare. The price tag represented a 32% premium to WellCare’s stock price prior to the deal’s announcement in March.
The Journal also reported through anonymous sourcing that other activists investors including Keith Meister’s Corvex Management and Sachem Head Capital Management have accrued stakes in Centene. For Third Point — one of Wall Street’s marquee activist investors in the U.S. and around the world — its involvement at the company likely adds gravity to any dissenting shareholder opinions on the Centene-WellCare transaction.
While the activists reportedly hope Centene will weight an outright sale, they may not be so opposed to Centene’s acquisition of WellCare to solicit votes against the deal.
“When considering M&A transactions, the Centene board considers any and all alternatives towards shareholder value creation,” Marcela Hawn, Chief Communications Officer at Centene, told CNBC in an email. “We believe the transaction with WellCare is in the best interest of shareholders as it will deliver significant upside growth and profitability. We remain as committed to our combination with WellCare today, as we did when we announced it on March 27.”
Centene and WellCare shareholders will vote on the deal on June 24.