July 20 (Bloomberg) -- Magellan Health Services Inc., a manager of behavioral, radiology and specialty drug services, is exploring the company’s sale and has held talks with possible bidders, said a person with knowledge of the matter.
Magellan is working with Credit Suisse Group AG, said the person, who declined to be identified because the discussions are private. The market value of the Avon, Connecticut-based company as of yesterday was $1.44 billion, after DealReporter said Magellan had been working on a possible sale.
Magellan also administers plans for Medicaid, the joint state-federal health program for the poor, according to its website. The company doesn’t comment on rumors and speculation, David Carter, a spokesman for Magellan, said in a telephone interview today. A Credit Suisse spokesman declined to comment.
Companies may be spurred to make more acquisitions as they seek to compete to manage an expanding Medicaid market under President Barack Obama’s health-care law.
UnitedHealth Group Inc., the biggest U.S. health plan, in February paid $2 billion to acquire XL Health Corp, which administers plans for chronically ill patients for Medicare, the U.S.-backed insurance program for the elderly and disabled. WellPoint Inc., the second-largest U.S. health insurer, on July 9 agreed to buy Amerigroup Corp. for $4.9 billion to become the biggest private provider of Medicaid coverage.
Magellan rose 4.9 percent to $55.12 at the close in New York, after yesterday gaining 12 percent. The shares have increased 11 percent this year.
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