CVS-Aetna merger values Aetna $9B above market

THE PROPOSED MERGER between CVS Health and Aetna overvalues Aetna stock by about $9 billion, according to the market. / BLOOMBERG FILE PHOTO/CHRISTOPHER LEE
THE PROPOSED MERGER between CVS Health and Aetna overvalues Aetna stock by about $9 billion, according to the market. / BLOOMBERG FILE PHOTO/CHRISTOPHER LEE

WOOSNSOCKET – With separate CVS Health and Aetna shareholders’ votes scheduled for March 13 in New York City, the companies’ proposed merger offer of Aetna stock remains overvalued by about $9 billion, according to the market.

According to a U.S. Securities and Exchange Commission filing announcing the shareholders’ voting meeting date, the merger consideration represented approximately $204.11 in value per Aetna common share. However, Aetna stock was valued at $176.39 per share, making the merger price $27.72 per share higher than market value at the close of trading on Feb. 9.

With 326.8 million shares outstanding, the merger deal values Aetna at about $9 billion higher than the market. The valuation comes on the heels of a 1,958.49 point drop in the market at close of trading Feb. 9 since Jan. 31, from 26,149.39 to 24,190.9, making it unclear to what degree the current value is related to investor confidence and how much is a factor of the market’s recent drop.

Two separate, simultaneous meetings of CVS Health and Aetna stockholders will be held March 13 at 11 a.m. in New York City, at the offices of Shearman & Sterling LLP, 599 Lexington Ave., and at the offices of Davis Polk & Wardwell LLP, 450 Lexington Ave., respectively, for each to vote on the merger.

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CVS Health expects to issue approximately 280 million shares of its common stock to Aetna shareholders in the merger. Based on the number of shares of CVS Health common stock outstanding as of Feb. 5, and the number of Aetna common shares outstanding as of Feb. 5, immediately following completion of the merger, CVS Health stockholders are expected to own approximately 78 percent of the outstanding shares of CVS Health common stock and former Aetna shareholders are expected to own approximately 22 percent of the outstanding shares of CVS Health common stock.

Rob Borkowski is a PBN staff writer. Email him at Borkowski@PBN.com.