(Adds analyst’s comments)
PHILADELPHIA, July 27 (Reuters) - U.S. health insurer Aetna Inc (AET.N) has hired financial advisers to help sell its pharmacy-benefit management (PBM) business, a source familiar with the situation said on Monday.
Aetna hired Bank of America Corp (BAC.N) and Credit Suisse Group AG CSGN.VX to run the sale of the business, the source said. Bank of America and Credit Suisse could not be immediately reached for comment.
The potential sale follows Express Scripts Inc’s (ESRX.O) deal to buy will buy health insurer WellPoint Inc’s WLP.N NextRx prescription business for $4.68 billion. Cigna Corp (CI.N) also said it is exploring strategic options for its drug benefits unit.
“While Aetna has previously indicated that it believes its integrated approach provides a competitive advantage, it appears the valuation of the proposed NextRx transaction has provided ... a new benchmark,” JP Morgan analyst Lisa Gill said in a research report.
News of the possible sale, which analysts said could fetch roughly $1.6 billion to $1.8 billion, was first reported by The Wall Street Journal.
CVS Caremark Corp (CVS.N) and Medco Health Solutions Inc MHS.N were seen as potential buyers, the source said.
Analysts added that pharmacy drug chain Walgreen Co WAG.N also could be a potential buyer.
“Based on the size of the deal, we would expect that an acquirer would need to take on some incremental debt to fund the transaction,” Gill said in a research report.
Aetna, which cut its full-year earnings forecast because of higher-than-projected medical costs, declined to comment.
Aetna shares fell $1.22, or 4.6 percent, to $25.22 on the New York Stock Exchange early Monday afternoon.
Reporting by Jessica Hall in Philadelphia and Ajay Kamalakaran in Bangalore; Editing by Andre Grenon and Richard Chang For more M&A news and our DealZone blog, go to here