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"What I've always found [is] when there's a certain amount of
uncertainty, there's a challenging environment, that's the time to act,"
Centene CEO Michael Neidorff says about its acquisition of WellCare.
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"There was a time this stock was a lot higher ... The time
was right and some things don't come back around," he says.
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We have a lot of time and patience for our long-term investors and
we have a lot of them. And I'm willing to bet a year from now we sit down and
talk you're going to say to me: 'You did it at the right time," he says.
Published
6:40 PM ET Wed, 27 March 2019 Updated 8:34 PM ET Wed, 27 March 2019CNBC.com
Centene CEO
Michael Neidorff on Wednesday told CNBC his company's $15 billion acquisition of WellCare Health Plans "made
more sense than I've seen in a long time."
"What I've always
found [is] when there's a certain amount of uncertainty, there's a challenging
environment, that's the time to act," he told "Mad
Money's" Jim Cramer in a one-on-one interview.
"That's when it's the best opportunity: Nobody's watching, nobody's
expecting it. You take a play that makes sense."
The host noted that
investors have begun selling off health care stocks, along with a range of
other securities. Health insurer shares also tumbled on Tuesday after the Trump
administration began making moves that seek to get rid
of the remaining parts of the Affordable Care Act.
WellCare is a
government-sponsored managed care company, while Centene services
government-sponsored health care programs for uninsured people.
Since early February,
shares of WellCare had shed more than $40 before the start of the week, though
the stock shot up more than 12 percent during Wednesday's session. Centene's
stock is down about 10 percent this year and lost nearly 5 percent on the day.
Cramer asked Neidorff why
not wait to make a deal.
"We did wait,"
the chief responded. "There was a time this stock was a lot higher ... The
time was right and some things don't come back around."
Neidorff ran through the
number of reasons he likes the deal. Wellcare bolsters Centene's Medicare
product, while Centene's technology platform bolsters WellCare's operations, he
said. Centene is using preventative technology to reduce costs and "get
ahead of the curve," he said.
Neidorff also gave a nod
to Apple and its health-focused wearable technologies, which he said is
"heading in the right direction."
The merger expands
Centene to three new states and strengthens its business in Michigan, he
continued. Furthermore, the company now has a presence in all 50 states in one
form or another, he said.
"Short-term, I don't
think about it. We have a lot of time and patience for our long-term investors
and we have a lot of them," Neidorff said. "And I'm willing to bet a
year from now we sit down and talk you're going to say to me: 'You did it at
the right time.'"
Neidorff also gave his
thoughts about the President Donald Trump's declaration that the GOP would be
known as "the party of health care."
"Let's wait and see
what they try to do first. There are lots of ideas, they have no ideas,"
he said, highlighting Republicans past plans to "repeal and replace"
ACA, also known as Obamacare. "Well they've tried that. I believe that
it's gonna hurt them politically if they keep doing that. The last election, I
believe people were worried about their health care."
Centene's board
officially extended the CEO's contract to 2024, Neidorff said.
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