|[November 28, 2012]
Humana Receives Antitrust Clearance to Proceed with Pending Acquisition of Metropolitan Health Networks, Inc.
LOUISVILLE, Ky. & BOCA RATON, Fla. --(Business Wire)--
Humana Inc. (NYSE: HUM) and Metropolitan Health Networks, Inc. (NYSE:
MDF) today announced that early termination of the waiting period under
the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended,
has been received in connection with Humana's previously announced
pending acquisition of Metropolitan.
Completion of the acquisition remains subject to approval by
Metropolitan shareholders and other customary closing conditions. A
meeting of the shareholders of Metropolitan to consider approval of the
acquisition is scheduled to be held on December 21, 2012. The
acquisition is expected to close by the end of the year.
Headquartered in Boca Raton, Fla., Metropolitan is a Medical Services
Organization and coordinates medical care for approximately 87,500
Medicare Advantage, Medicaid, and other beneficiaries, primarily in
Florida, utilizing a primary care-centric business model.
This news release includes forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. When used in
investor presentations, press releases, Securities and Exchange
Commission ("SEC (News - Alert)") filings, and in oral statements made by or with the
approval of one of Humana's executive officers, the words or phrases
like "expects," "anticipates," "intends," "likely will result,"
"estimates," "projects" or variations of such words and similar
expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties, and assumptions,
including, among other things, information set forth in the "Risk
Factors" section of Humana's and Metropolitan's respective SEC filings,
as well as the other information that Humana and Metropolitan may
provide with respect to the pending merger, a summary of which includes
but is not limited to the following:
If Humana does not design and price its products properly and
competitively, if the premiums Humana charges are insufficient to
cover the cost of health care services delivered to its members, if
the company is unable to implement clinical initiatives to provide a
better health care experience for its members, lower costs and
appropriately document the risk profile of its members, or if its
estimates of benefit expenses are inadequate, Humana's profitability
could be materially adversely affected. Humana estimates the costs of
its benefit expense payments, and designs and prices its products
accordingly, using actuarial methods and assumptions based upon, among
other relevant factors, claim payment patterns, medical cost
inflation, and historical developments such as claim inventory levels
and claim receipt patterns. These estimates, however, involve
extensive judgment, and have considerable inherent variability because
they are extremely sensitive to changes in payment patterns and
medical cost trends.
If Humana fails to effectively implement its operational and strategic
initiatives, including its Medicare initiatives, the company's
business may be materially adversely affected, which is of particular
importance given the concentration of the company's revenues in the
If Humana fails to properly maintain the integrity of its data, to
strategically implement new information systems, to protect Humana's
proprietary rights to its systems, or to defend against cyber-security
attacks, the company's business may be materially adversely affected.
Humana's business may be materially adversely impacted by CMS's
adoption of a new coding set for diagnoses.
Humana is involved in various legal actions and governmental and
internal investigations, including without limitation, an ongoing
internal investigation and litigation and government requests for
information related to certain aspects of its Florida subsidiary
operations, any of which, if resolved unfavorably to the company,
could result in substantial monetary damages. Increased litigation and
negative publicity could increase the company's cost of doing business.
As a government contractor, Humana is exposed to risks that may
materially adversely affect its business or its willingness or ability
to participate in government health care programs.
Recently enacted health insurance reform, including The Patient
Protection and Affordable Care Act and The Health Care and Education
Reconciliation Act of 2010, could have a material adverse effect on
Humana's results of operations, including restricting revenue,
enrollment and premium growth in certain products and market segments,
restricting the company's ability to expand into new markets,
increasing the company's medical and operating costs by, among other
things, requiring a minimum benefit ratio on insured products (and
particularly how the ratio may apply to Medicare plans, including
aggregation, credibilty thresholds, and its possible application to
prescription drug plans), lowering the company's Medicare payment
rates and increasing the company's expenses associated with a
non-deductible federal premium tax and other assessments; financial
position, including the company's ability to maintain the value of its
goodwill; and cash flows. In addition, if the new non-deductible
federal premium tax and other assessments, including a three-year
commercial reinsurance fee, were imposed as enacted, and if Humana is
unable to adjust its business model to address these new taxes and
assessments, such as through the reduction of the company's operating
costs, there can be no assurance that the non-deductible federal
premium tax and other assessments would not have a material adverse
effect on the company's results of operations, financial position, and
Humana's business activities are subject to substantial government
regulation. New laws or regulations, or changes in existing laws or
regulations or their manner of application could increase the
company's cost of doing business and may adversely affect the
company's business, profitability and cash flows.
Any failure to manage administrative costs could hamper Humana's
Any failure by Humana to manage acquisitions and other significant
transactions successfully may have a material adverse effect on its
results of operations, financial position, and cash flows.
If Humana fails to develop and maintain satisfactory relationships
with the providers of care to its members, the company's business may
be adversely affected.
Humana's pharmacy business is highly competitive and subjects it to
regulations in addition to those the company faces with its core
health benefits businesses.
Changes in the prescription drug industry pricing benchmarks may
adversely affect Humana's financial performance.
If Humana does not continue to earn and retain purchase discounts and
volume rebates from pharmaceutical manufacturers at current levels,
Humana's gross margins may decline.
Humana's ability to obtain funds from its subsidiaries is restricted
by state insurance regulations.
Downgrades in Humana's debt ratings, should they occur, may adversely
affect its business, results of operations, and financial condition.
Changes in economic conditions could adversely affect Humana's
business and results of operations.
The securities and credit markets may experience volatility and
disruption, which may adversely affect Humana's business.
Given the current economic climate, Humana's stock and the stock of
other companies in the insurance industry may be increasingly subject
to stock price and trading volume volatility.
In making forward-looking statements, neither Humana nor Metropolitan
are undertaking to address or update them in future filings or
communications regarding their respective business or results. In light
of these risks, uncertainties, and assumptions, the forward-looking
events discussed herein may or may not occur. There also may be other
risks that Humana and Metropolitan are unable to predict at this time.
Any of these risks and uncertainties may cause actual results to differ
materially from the results discussed in the forward-looking statements.
Humana and Metropolitan advise investors to read the following documents
as filed by the respective companies with the SEC for further discussion
both of the risks they face and their respective historical performance:
Form 10-Ks for the year ended December 31, 2011;
Form 10-Qs for the quarters ended March 31, 2012; June 30, 2012; and
September 30, 2012;
Form 8-Ks filed during 2012.
In addition to the foregoing, Metropolitan investors and others are
cautioned that (i) Metropolitan and Humana may not be able to complete
the proposed transaction on the terms contained in the merger
agreement,, or at all, due to a number of factors, including but not
limited to as a result of the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement, and Metropolitan will incur significant fees and expenses
regardless of whether the merger is consummated; (ii) if the merger is
not consummated under certain specified circumstances, Metropolitan may
be required to pay Humana a termination fee plus reimbursement for fees
and expenses and (iii) the consummation of the merger is subject to
satisfaction of the closing conditions to the proposed merger, including
approval of the pending transaction by the shareholders of Metropolitan.
Additional Information about this Transaction
In connection with the pending transaction with Humana, on November 26,
2012, Metropolitan filed with the SEC a definitive proxy statement and
commenced the mailing of the definitive proxy statement to
Metropolitan's shareholders of record as of the record date of November
16, 2012. METROPOLITAN URGES INVESTORS AND SECURITY HOLDERS TO READ THE
DEFINITIVE PROXY STATEMENT REGARDING THE PENDING TRANSACTION IN ITS
ENTIRETY BECAUSE IT CONTAINS IMPORTANT INFORMATION. You may obtain a
free copy of the proxy statement and other related documents filed by
Metropolitan with the SEC at the SEC's website at www.sec.gov.
The proxy statement and the other documents filed by Metropolitan with
the SEC may also be obtained for free by accessing Metropolitan's
website at www.metropolitanhealthnetworks.com
and clicking on the "Investors" link then clicking on the link for "SEC
Copies of the proxy statement and Metropolitan's other filings with the
SEC can also be obtained, free of charge, by directing a request to
Metropolitan, 777 Yamato Road, Suite 510, Boca Raton, Florida 33431
Attention: Al Palombo.
Participants in this Transaction
Metropolitan and its directors, executive officers and certain other
members of management and employees may be deemed to be participants in
the solicitation of proxies from shareholders of Metropolitan in favor
of the pending transaction. Information regarding the persons who may,
under the rules of the SEC, be considered participants in the
solicitation of shareholders in connection with the pending transaction
is set forth in the definitive proxy statement filed by Metropolitan
with the SEC on November 26, 2012. You can find information about
Metropolitan's executive officers and directors in its definitive proxy
statement filed with the SEC on May 3, 2012. You can obtain free copies
of these documents by directing a request to Metropolitan, 777 Yamato
Road, Suite 510, Boca Raton, Florida 33431 Attention: Al Palombo.
Humana Inc., headquartered in Louisville, Kentucky, is a leading health
care company that offers a wide range of insurance products and health
and wellness services that incorporate an integrated approach to
lifelong well-being. By leveraging the strengths of its core businesses,
Humana believes it can better explore opportunities for existing and
emerging adjacencies in health care that can further enhance wellness
opportunities for the millions of people across the nation with whom the
company has relationships.
More information regarding Humana is available to investors via the
Investor Relations page of the company's web site at www.humana.com,
including copies of:
Annual reports to stockholders;
Securities and Exchange Commission filings;
Most recent investor conference presentations;
Quarterly earnings news releases;
Replays of most recent earnings release conference calls;
Calendar of events (including upcoming earnings conference call dates
and times, as well as planned interaction with research analysts and
Corporate Governance information
About Metropolitan Health Networks, Inc.
Metropolitan is a growing health care company that provides and
coordinates comprehensive health care services for Medicare Advantage,
Medicaid, and other customers through its primary care-centric
businesses, MetCare of Florida, Inc., Continucare Corporation, and
Symphony Health Partners, Inc. Metropolitan currently owns and operates
35 medical centers and contracts with a network of independent primary
care practices. To learn more about Metropolitan Health Networks, Inc.,
please visit its website at www.metropolitanhealthnetworks.com.
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