In late March, with M&A interest already apparent, Goldman was nonetheless hired and Barclays was brought in as a co-advisor, splitting any prospective deal-related fees.
"Representatives of Barclays, Skadden and management of the company discussed that given the current state of the board's deliberations on potential strategic alternatives, uncertainty caused by the United States Supreme Court decision regarding the Affordable Care Act expected in June 2012, and that any transaction would be subject to the receipt of numerous regulatory approvals, although there was no certainty, it would be unlikely that a transaction involving the sale of the company would close prior to October 22, 2012," says Amerigroup in its proxy.
However, when inquiring about Amerigroup's July 9 sale - expected to close in early 2013 - and the terms of Goldman's warrants, the bank appears poised for the $233 million windfall if the deal were to stand as is.
When Amerigroup presented its advsors with a June 1 proposal to enter exclusive negotiations with WellPoint on a sale, LMPERS argues it's no surprise Goldman advised on moving forward.Nevertheless, Amerigroup's proxy detailing its sale at length does also show a M&A process that took WellPoint's bid from the mid-$80s to $92, in a takeover that came at a 43% premium. That premium is also larger than Coventry Health Care's $5.7 billion takeover. Still in a shareholder landscape dominated by activists and large pension funds, LMPERS' dogged and oftentimes-successful litigation may be a new check on C-Suite malfeasance. Were Goldman's advice in Amerigroup's sale to WellPoint to yield similar discovery and judicial findings as those stemming from LMPERS' El Paso suit, it might be cause for investment bankers and executives to think twice before assembling sweetheart deals for everyone but shareholders. -- Written by Antoine Gara in New York
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV