Rushed to the altar?

images-2.jpegLast month, health care giant Humana (HUM) announced plans to acquire the much smaller KMG America (KMA) for $6.20 a share. While KMA stock rose sharply when the deal was announced on Sept. 10, there was an interesting tidbit in the preliminary merger proxy that KMG filed late yesterday that makes me wonder whether KMG investors are really getting such a great deal.

That’s because yesterday’s filing revealed for the first time that KMG was dealing with an SEC comment letter — a letter which the filing notes was provided to Humana on Aug. 21 — about three weeks before the deal was announced. Yesterday’s filing also notes that a condition of the merger was the “satisfactory resolution of the comments in the SEC comment letter.”

While the comment letter doesn’t appear to be publicly available, at least not yet, the filing notes that it had to do with the company’s 2006 10-K and that the SEC completed its review on Sept. 6. The next day, Humana’s management approved the deal. But given where KMG was trading earlier this year — close to $10 in mid-March — you have to wonder whether the mere presence of the comment letter pushed KMG to rush to the altar a bit too prematurely.