Centene Jumps as Health Insurer Weighs Divesting International Ops

(Bloomberg) -- Centene Corp. is exploring options to offload its international operations, including a U.K. hospital operator that it acquired just this year, as the health insurance giant tries to bolster profit margins and refocus on its core business.

The move is part of a broader review the portfolio to maximize value, said Sarah London, vice chairman of Centene’s board and president of the company’s health care enterprises business. She didn’t specify what types of deals the company would consider for any divestitures.

“We are committed to a comprehensive portfolio review, beginning with non-core assets,” London said Friday during the company’s investor conference. “Let me say it simply: If it doesn’t fit, it doesn’t stay.”

The company serves 26.5 million members, primarily in U.S. government-sponsored programs including Medicaid, Medicare and the Affordable Care Act marketplaces. It says it’s the top seller of Medicaid and marketplace plans.

Centene said 2022 adjusted earnings would be $5.30 to $5.50 per share, with revenue of $135.9 billion to $137.9 billion. The forecast includes its pending acquisition of Magellan Health Inc. The shares rose 5.6% to $79.08 in New York, their highest on record.

The company identified two European assets being assessed as part of the portfolio review that together account for more than $2 billion in revenue: the U.K. hospital operator Circle Health, and Ribera Salud, a Spanish hospital and clinic company.

In July, Centene bought the remaining 60% interest in Circle Health that it didn’t own, for $700 million in cash, according to a company filing.

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