Humana gains amid reports of renewed Cigna talks (update)

Update 4:40pm: Adds Bloomberg reporting.

Humana (NYSE:HUM) gained 3% in after hours trading amid reports that it’s resumed talks with rival Cigna (CI). Cigna fell 1.5%.

The two managed care providers have had informal talks recently about a potential deal, according to a Bloomberg report on Friday, which cited people familiar with the matter. Earlier Friday, there was a Betaville “uncooked” that there was speculation that Humana received a takeover bid. Cigna and a Western European company may be interested, according to the report.

No decision has been made and Cigna or Humana may push any deal past the new year or could decide to abandon any deal, according to Bloomberg.

Cigna (CI) is trying to close the sale of its Medicare Advantage business in the coming weeks before going forward with another deal, Bloomberg reported.

Humana (HUM) declined to comment to Seeking Alpha, saying it has a policy of not discussing market rumors or speculation.

The deal talk comes after Cigna (CI) and Humana (HUM) last December scrapped plans to merge after being unable to agree on financial terms, including price. Investors failed to embrace the idea of a merger, with Cigna shares dropping 8% following news of an impending deal.

The WSJ said at the time that the proposed merger deal would have had Cigna acquire Humana in a cash-and-stock deal with a “large” stock component. There was also some speculation last October about Walmart (WMT) and Humana (HUM) possibly reviving talks that were reported in 2018. The WSJ reported in March 2018 that Walmart was in preliminary talks to buy Humana.

A potential Humana (HUM) sale comes after the managed care company’s shares have plunged 41% this year. Humana (HUM) could be more vulnerable to a takeover after its shares sunk 22% on the first two days of the month after the company announced a sharp decline in membership enrolled in its top-rated Medicare Advantage (MA) plans, its latest headwind related to government-backed insurance.

Humana (HUM) is set to report Q3 results on Oct. 30.