Humana Shares Spike 20 Percent After Takeover Report Surfaces

Shares of Humana (HUM) ended Friday's trading session up 20 percent, making it TheStreet's Move of the Day.
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Shares of Humana (HUM) ended Friday's trading session up 20 percent, making it TheStreet's Move of the Day. The stock jumped after unnamed sources told The Wall Street Journal that the Louisville, K.Y.-based insurance giant is weighing a sale and has been in talks with Hartford, C.T.-based Aetna (AET) and Bloomfield, C.T.-based Cigna (CI). The newspaper also reported that Humana is working with Goldman Sachs (GS) as it mulls a takeover. In 2014, the company covered almost 14 million members, making the insurer an attractive target for another insurance company looking to expand their reach, according to Morningstar analyst Vishnu Lekraj. 'A deal has most likely been in the works for a while,' he said. 'A lot of analysts, including myself, expected something to happen with Humana given the opportunity for some larger insurer to add to their medical membership and diversify what they have.' He also said how the deal could help Humana, which he says is at a disadvantage. 'Humana is very reliant on Medicare, which is facing reimbursement pressure from the government,' referring to increased regulation and cost cutting measures in Medicare amid the Affordable Care Act. A spokesperson from Humana did not immediately return TheStreet's request for comment. TheStreet's Scott Gamm reports from New York.