WellCare news about the company signing a deal with Centene has WCG stock flying high on Wednesday.
The deal between WellCare (NYSE:WCG) and Centene (NYSE:CNC) will have the two combining to create a larger company in the healthcare market. This will have CNC spending $15 billion in cash to acquire WCG.
The WellCare news has CNC offering $305.39 per share for WCG stock. This will be paid in a combination of cash and stock. This split has it offering $120 in cash and 3.38 shares of CNC stock for each share of WCG stock. The price is based on CNC stock’s closing price on March 26, 2019.
The offer from Centene represents a 21% premium to the 30-day volume weighted average closing stock price for WCG stock. It is also a roughly 32% premium over the stock’s closing price on March 26, 2019.
After the deal reaches completion, the new company will be split between stockholders of the two different companies. This will have CNC shareholders owning a 71% stake in the company. The remaining 29% will belong to shareholders of WCG stock.
While this WellCare news is good for the stock, it will still be some time before the deal closes. This includes it having to get approval from both regulators and shareholders. If all this goes well, then it will close during the first half of 2020.
WCG stock was up 9% and CNC stock was down 7% as of Wednesday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.