CVS-Aetna merger not a shoo-in: Wall St.

While executives at CVS Health expressed confidence on Monday that its $69 billion purchase of Aetna will sail past regulators, Wall street was not so sure.

Aetna shares closed Monday down 1.4 percent, to $178.70 — well below the $207-a-share purchase price.

CVS will pay $145 in cash and $62 in newly issued shares.

CVS shares fell 4.6 percent, to $71.69.

“I think people who normally buy after an M&A deal is announced are being more cautious,” the head of one prominent hedge fund said.

The spread on the CVS-Aetna deal (the difference between the current trading price and what is being offered) is 26 percent, when one would expect it to be around 20 percent, the hedgie said.

Considering that Aetna’s share price would be around $160 a share without a merger, the market is saying there is only a 40 percent chance the deal will get approved by regulators, a second source said.

That is similar to the odds traders are now giving the AT&T buyout of Time Warner getting regulatory approval — and the Justice Department has sued to stop that deal.

Many traders lost money on Time Warner, making them cautious.

Harvard Professor David Cutler, who consulted with President Obama’s Justice Department on health insurance mergers, told The Post his concern is that CVS already owns one of the country’s big three pharmacy benefit managers (who buy from drug wholesalers) and he is not completely comfortable with it also owning one of the country’s top three insurers.

There is the potential for a combined CVS and Aetna to get drug price rebates but not pass those savings on to other pharmacies and insurers in their PBM system, giving Aetna an unfair advantage, he said.