A federal judge last week reportedly threatened to derail the already-closed $70 billion buyout of health insurer Aetna (NYSE:AET) by CVS Health (NYSE:CVS), saying he felt “kept in the dark, kind of like a mushroom.”
At a normally routine hearing last week prior to approving the deal, Judge Richard Leon, of the U.S. District Court for the District of Columbia, said he might put off a decision until the summer or even spike the deal altogether, Reuters reported.
“I was reviewing your motion, which, of course is not opposed. And I kind of got this uneasy feeling that I was being kept in the dark, kind of like a mushroom,” Leon said, noting that the American Medical Association, among others, had objected to the deal. “I’m very concerned, very concerned that you all are proceeding on a rubber-stamp approach to this.”
The companies closed the buyout, announced in December 2017, on Nov. 28. It calls for Aetna stockholders to receive $145 in cash and 0.8378 CVS shares for each AET share, for a total value of $212 per share or roughly $70 billion. Woonsocket, R.I.-based CVS is financing the deal with cash on hand and debt, including a $40 billion senior notes offering and a two-tranche term loan of $5 billion. But in order to seal the deal, Aetna had to agree to deal its 2.2-million-member Medicare Part D drug plan to WellCare Health Plans (NYSE:WCG). That deal is slated to close within the next few business days, pending Leon’s approval.
“It’s commonplace for acquisitions to close before this final step in the process is complete, and our focus remains on delivering on the combined company’s potential,” CVS said in prepared remarks to the wire service.