USA Today

A California health insurer and a Dutch investment bank are making a bold bid to take over Aetna US Healthcare.

Wellpoint Health Networks and ING Group made the $ 10 billion cash-and-stock offer to Aetna‘s board last week, the day before Aetna‘s CEO resigned in the face of declining stock value.

Aetna confirmed the offer Wednesday, but said its board is reviewing the proposal.

If the deal goes through — and one consumer group says it will appeal to the Justice Department to block it — Wellpoint would become the nation’s largest health insurer, with more than 28 million customers.

Dutch investment bank ING would take over:

* Aetna Financial Services, which sells retirement and investment products, and

* Aetna International, which sells life, health and financial services in emerging markets.

At about $ 70 a share, Wellpoint and ING would be getting a bargain, analysts say.

After all, Aetna paid $ 8.9 billion just for U.S. Healthcare in 1996.

“(Wellpoint) would get a good price and a tremendous business platform,” says Greg Crawford, analyst with Fox-Pitt Kelton in New York.

Aetna‘s shares rose 11 7/8 Wednesday to $ 53. In May, Aetna stock was nearly $ 100, but its price has fallen sharply in recent weeks.

Wellpoint fell 5 5/8 at $ 61 7/8.

Both companies have critics. Aetna has been lambasted by doctors for what they say are restrictive contracts and miserly payments.

Like other insurers, it has been hit with patient class-action lawsuits.

Some hospitals have criticized Wellpoint for not paying them enough.

Jamie Court of Consumers for Quality Care says his organization will ask the U.S. Justice Department to block the deal, saying it will reduce choice for patients, employers, doctors, nurses and hospitals.

“This deal would mean that the seven giant companies that control this market would be reduced to six,” Court said.

Worries about market share dominance caused the Justice Department in June to order Aetna to sell business in Texas in order to complete a $ 1 billion merger with Prudential.

The current offer would give Wellpoint access to a broader range of products.

About three-quarters of Wellpoint’s 7.3 million members are in preferred provider plans, which have fewer restrictions than HMOs.

Aetna has about 21 million members, with about half in health maintenance organizations, which have stricter rules.