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Triple-S Management's shares soar after inking takeout deal with GuideWell

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Triple-S Management's shares soar after inking takeout deal with GuideWell

Triple-S Management Corp.'s stock continued its weeks-long ascent after news broke that the company would be acquired by health solutions provider GuideWell Mutual Holding Corp.

Insurance stocks closely traced the broader market for the week ended Aug. 27. The S&P 500 gained 1.52%, closing at 4,509.40, while the S&P 500 Insurance Index rose 1.58% to 533.50.

GuideWell earlier in the week announced plans to acquire Triple-S Management for approximately $900 million. According to an S&P Global Market Intelligence analysis, the transaction would create one of the top 10 Medicare writers in the U.S. The deal is expected to close in the first half of 2022.

Triple-S Management CEO Roberto Garcia-Rodriguez said the deal made sense given the strategic fit and noted that the price tag represented a significant premium to the share price prior to the announcement. Investors pushed into the stock after the transaction was announced, sending the price up 46.6% at week's end.

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Elsewhere in the managed care sector, Cigna Corp. said it will buy back $2 billion in its common shares through accelerated stock repurchase agreements with Morgan Stanley and JPMorgan Chase.

Cigna ended the week up 1.45%.

Another potentially market-moving event this week was the news that Brown & Brown Inc. unit Brown & Brown of Massachusetts LLC is snapping up the assets and operations of Berkshire Insurance Group Inc. from Berkshire Hills Bancorp Inc. The deal, worth $41.5 million, is expected to be completed in the third quarter.

Brown & Brown's shares ticked up 0.68%.

In the insurance technology space, Root Inc. put together a solid week as its shares jumped 13.3%.

All eyes over the weekend will be on the Gulf Coast as Ida rapidly strengthens and looks poised to strike Louisiana as a major hurricane. The Progressive Corp. and The Allstate Corp. are significant players in the Louisiana P&C market, Piper Sandler analyst Paul Newsome pointed out in a note to clients. Given the possibility that Ida could strike New Orleans, Newsome said there is a chance that the storm could be a significant insured loss event.

He also said that stock price movements related to storms are "as unpredictable as the hurricanes themselves."

"We recommend investors 'dollar-cost-average' their way into the stocks of insurers they already think are inexpensive when stocks decline due to fears about losses related to hurricanes," Newsome added.

For the week, Progressive slipped 0.13%, while Allstate added 2.25%.