8-KMaterial AgreementsExhibits & Filings

CENTENE CORP 8-K Report, Material Agreement (Jan 4, 2021)

Filed January 4, 2021For Securities:CNC

Summary

Centene Corporation (CNC) has announced a significant strategic move through an Agreement and Plan of Merger with Magellan Health, Inc. This filing details the terms of the acquisition, where Centene will acquire Magellan Health for $95.00 per share in cash. The transaction, structured as a merger with a wholly-owned subsidiary of Centene, aims to combine the operations of the two healthcare companies. The acquisition is subject to customary closing conditions, including regulatory approvals, antitrust clearance, and the adoption of the merger agreement by Magellan Health's stockholders. The deal is expected to close by October 4, 2021, with a potential extension to January 4, 2022. This acquisition represents a substantial cash outlay for Centene, with a bridge financing commitment from JPMorgan Chase Bank, N.A., for up to $2.381 billion. The integration of Magellan Health is expected to bring synergies and value creation, although potential risks related to regulatory approvals, integration challenges, and unforeseen costs are highlighted. Investors should closely monitor the progress of regulatory reviews and Magellan Health's stockholder vote, as well as Centene's financial position and integration strategy post-acquisition.

Key Highlights

  • 1Centene Corporation to acquire Magellan Health for $95.00 per share in an all-cash transaction.
  • 2The transaction is structured as a merger with Magellan Health becoming a wholly-owned subsidiary of Centene.
  • 3The acquisition is subject to customary closing conditions, including regulatory approvals, antitrust clearance, and stockholder adoption.
  • 4Centene has secured a bridge financing commitment of up to $2.381 billion from JPMorgan Chase Bank, N.A. to fund the transaction.
  • 5The merger agreement includes provisions for termination fees and restrictive covenants for both parties.
  • 6The outside date for the transaction's consummation is October 4, 2021, with a possible extension to January 4, 2022.
  • 7The filing identifies numerous forward-looking statements and associated risks, including but not limited to regulatory hurdles, integration challenges, and potential impacts of COVID-19.

Frequently Asked Questions

The acquisition price is $95.00 per share in cash for each share of Magellan Health common stock. The total value would depend on the number of outstanding shares of Magellan Health at the time of closing.

The key conditions include the adoption of the merger agreement by Magellan Health's stockholders, receipt of U.S. federal antitrust clearance and other required regulatory approvals, the absence of any laws or orders prohibiting the merger, no material adverse effect on Magellan Health, and the satisfaction of representations, warranties, and covenants by both parties.

Centene has entered into a bridge financing commitment with JPMorgan Chase Bank, N.A., for up to $2.381 billion in the form of a senior unsecured bridge loan facility.

Magellan Health will be required to pay Centene a termination fee of $76,530,000 under specific circumstances, such as terminating the agreement to accept a superior proposal or if Magellan Health materially breaches its non-solicitation obligations.