PhillyDeals: Cigna CEO: Health-care bill unsustainable

Ten minutes after the U.S. House voted Sunday to force Americans to buy health insurance or pay a fine, Philadelphia-based Cigna Corp. posted a two-handed corporate reaction.

Cigna said that it "recognizes the historical significance of the enactment of the Patient Protection and Affordable Care Act" and "fully supports" its goal of getting everyone insured.

It called some of the bill's reforms "overdue, such as eliminating preexisting conditions from coverage decisions, providing full coverage for preventive services, and opening up access to many who are not currently insured."

Of course, insurers didn't take those "overdue" steps without government action.

But Cigna also said that it's the company's "strong belief that this law does not adequately improve quality and address the dramatic cost increases of our health care delivery system."

Cigna chief executive David Cordani called on lawmakers to "remain engaged with Cigna" and other insurers. Or, the company warned, "the current proposal will only expand access and further erode affordability and quality of care for all. This is not a sustainable solution to America's rising health care cost problem."

The planned sale of Mount Laurel's construction-loss-plagued Sterling Bank to Roma Bank of suburban Trenton was announced last week at a modest $2.52 per share, a disappointment for Sterling investors like mutual-fund manager Wellington Management Co., Cumberland Advisors of Vineland, and the bank's boardful of South Jersey business owners.

The sale price was double Sterling's recent lows. But the stock had peaked at more than $11 a share in 2006 and traded above $6 for most of the company's history, which started in the last big bank crisis 20 years ago.

Who's next? Griffin Financial Group chief Joseph Harenza, who advised Sterling on the sale, wouldn't name other local acquisition targets.

But he said several "high-quality," capital-swollen, depositor-owned mutual banks and ex-mutuals in the region can afford to buy at today's prices: "Banks like Prudential Savings Bank, Polonia Bank, Cape Bank, Fox Chase Bank" are likely acquirers of their less-well-endowed rivals.

A deal between semiconductor companies in London and Kansas could mean a welcome payday for Pennsylvania's battered school pension fund.

Milestone Partners, St. David's, said yesterday that it has agreed to sell Interconnect Devices Inc., Kansas City, to a unit of England-based Smiths Group P.L.C. for $185 million in cash, pending federal government approval.

Milestone bought control of the military and medical electronic connectors maker in May 2007 with a group of partners, and expanded the company with acquisitions focused on the China market.

The Milestone Partners II fund invested a total of $21 million in the firm over the last three years, and it will gross "in excess of $60 million" from the sale, managing partner John Shoemaker told me.

Milestone II's largest investor is the Pennsylvania Public School Employees' Retirement System (PSERS), which provided 25 percent of the fund's $120 million in total funding commitments.

"If this closes, we'll have returned $140 million to investors since the fund was raised in 2004-05," according to Shoemaker. The fund still has seven investments unsold, which means potential future profits.

That won't come close to closing the multibillion-dollar gap between PSERS' current assets and its future pension payouts, or the resulting threat of school district property-tax increases.

But more deals like this, over many years, wouldn't hurt, from state and school taxpayers' point of view.

Helping hand Health-care sector pushes Dow. C4.

Support, skepticism Cigna CEO's remarks hit both sides of fence.

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