Four days after being snubbed by
Oxford Health Plans
finds itself in the arms of another suitor.
said Monday it will acquire the health maintenance organization for stock and cash worth $56.79 a share, based on Monday's close. The price was lowered by a swoon in UnitedHealth's stock price that occurred when word of the deal broke in the market at about 3:30 p.m. EDT.
Based on about 84.5 million shares Oxford shares outstanding, the value of the transaction comes to about $4.8 billion. Oxford closed Monday up $4.05, or about 8%, to $54.94. UnitedHealth fell $2.05, or 3.1%, to $63.90.
Oxford, which has about 1.4 million members, mostly in the Northeast, had annual revenue of about $5.5 billion and net income of about $352 million in its last fiscal year. UnitedHealth, which has about 20 million members, had revenue in the last fiscal year of about $30 billion and net income of about $2 billion.
UnitedHealth expects the transaction to add about 16 cents a share to its annual earnings starting at closing, excluding synergies of $80 million to $100 million in the first year. UnitedHealth said the addition of Oxford will lift its annual growth rate from the 15% it foresaw before the deal.
Oxford Health also said Monday that its first-quarter earnings rose to $86.7 million, or $1.03 a share, from $72.9 million, or 86 cents a share, last year. Premium revenue increased 5.6% to $1.38 billion. Analysts surveyed by Thomson First Call were forecasting earnings of $1 a share on revenue of $1.39 billion in the quarter.
WellChoice, the parent company of Empire Blue Cross Blue Shield, said last Thursday that had ended negotiations toward an acquisition of Oxford.