Signify Health stock pops on potential Amazon bid

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Yahoo Finance Live anchors discuss reports indicating that Amazon may bid to acquire Signifiy Health.

Video Transcript

- Another mover that we're watching this morning is Signify Health. Now, it's popping on News that Amazon's going to join the bidding to purchase the health care company. That's according to "The Wall Street Journal." Also, brands like CVS and UnitedHealth Group also plan to bid in the auction for Signify.

It could be an $8 billion deal. Again, that's according to "The Wall Street Journal." The bids are due around Labor Day. What the heck is Signify Health? Well, it is a home health services provider.

Now, this is a business, perhaps, that CVS has been wanting to get into, UnitedHealth as well. Amazon, of course, just agreeing to acquire the parent company of One Medical, which has-- not in your home medical services, but ones that you go to an office for. But nonetheless, interesting here, this race that we are seeing, [INAUDIBLE], for these kinds of businesses.

- Yeah, I'm starting to feel bad for CVS Health and CEO Karen Lynch. I mean, they were rumored to be involved in One Medical. Amazon comes out here with their bottomless pit of cash, goes out and scoops that one up. Could be the likely winner here.

It's tough because if you're a CVS investor, you now are probably concerned about the company overpaying to get this type of asset, get this specific asset, and if they miss out on this one, potentially overpaying for the next key health care asset that comes up for sale, whenever that might be. And when you overpay, you run the risk of seeing lower returns over time for that investment.

- Yeah, we could be at the next wave of consolidation, especially considering some of what we had seen in 2017, 2018 among the pharmacy benefits managers and some of the insurance practices. But now, even more of the actual service being consolidated alongside some of the UnitedHealths-- UnitedHealth is a bidder in this as well. They have, apparently-- and based on these reports, the highest bid for Signify. That is above $30 a share. Amazon just behind that, according to the reports.

And so with all of this considered, UnitedHealth could potentially, by investors, at least, be looked at as one of the best offers that's on the table right now despite Amazon's presence and what they could potentially also offer for Signify Health if it is consolidated into that, of course, tech giant that has tentacles in every different sector, seemingly at this point.

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