The Institutional Shareholder Services, an influential shareholder adviser, gave Centene and WellCare Health Plans a vote of confidence on their $17 billion deal, according to Forbes contributor Bruce Japsen.
ISS' endorsement comes as other hedge funds have spoken out against the deal. The merger, which would create a healthcare giant with 22 million members, also faces tough regulatory and antitrust scrutiny.
Mr. Japsen writes ISS' recommendation is usually a positive sign for mergers. According to ISS, cited by Forbes, "[Centene] did not conduct an auction, and the merger consideration is below the company's all-time high closing price. However, the merger appears sound strategically and financially, and the merger consideration implies meaningful premia to the company's historical valuation and its unaffected price. As such, support for the transaction is warranted."
Centene and WellCare announced their deal in March.
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