Aetna in Talks With ING Group to Sell Units

Aetna's stock closed up 6.5% following news of the talks.
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About two months ago,

Aetna

(AET)

, the nation's largest health insurer, turned down overtures from the Dutch financial services company

ING Group

(ING) - Get Report

. Now, they have renewed their courtship.

Aetna said Wednesday that it was in talks to sell its financial and overseas businesses to

ING America Insurance Holdings

, a division of ING Group.

The announcement followed an afternoon of speculation about a possible deal that sent Aetna's stock surging. But Wall Street analysts greeted the news with a collective shrug, saying that whispers of possible deals have been floating around for months.

Aetna's shares finished up 4 1/16, or 6.5%, at 66 3/4, after trading as high as 69 following a

CNBC

report that the two companies were in talks. ING's American depositary receipts, meanwhile, edged up 3/16, to close at 60 5/16.

Neither Aetna nor ING, which also confirmed the negotiations after the stock market closed, would discuss a possible price tag for Aetna's financial and overseas businesses. But

CNBC

, citing unidentified people close to Aetna, said the health insurer was weighing an offer from ING for as much as $9 billion.

John Rex, an analyst with

Bear Stearns

who follows Aetna, noted the rumored $9 billion ING offer for Aetna's financial divisions, and compared it with the $9.3 billion market capitalization -- the value set by the market -- for the entire company. "It's a big number, a very big number," Rex said.

Hartford, Conn.-based Aetna has been talking with possible suitors for months. In March, ING, along with

WellPoint Health Networks

(WLP)

, made a $10 billion

bid for the company. But Aetna turned that offer down and announced plans to

split into two publicly traded companies -- one for health insurance and the other for financial services.

"Rumors about taking out Aetna have been driving the stock for months," Rex said. "I never viewed the company as taking itself off the table." Rex has an 'attractive' rating for the stock, and Bear Stearns has not been an underwriter for Aetna.

Any potential deal is driven by attempts to increase Aetna's stock price, analysts said, rather than an effort to shed a sick business. "They're working for shareholder value," said Jeff Pittsburg, president of securities research firm

Pittsburg Institutional

of Little Neck, N.Y. Pittsburg has a 'buy on weakness' rating for Aetna, meaning that he thinks it is a 'good buy' under $70 a share.

"The idea is that the sum of the parts are better than the stock market valuation," Rex said.