Monday Business Briefing: ACA architect criticizes health care mergers; Brown-Forman didn’t authorize ‘Game of Thrones’ shirts; Kindred shares plummet; and more
Welcome to the June 13 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Former top health official criticizes proposed health care mergers
A former top U.S. health official said she worries the proposed merger between health insurers Aetna and Humana will reduce competition and increase consumer prices.
Hartford, Conn.-based Aetna wants to buy Louisville-based Humana for $37 billion. The companies have said the merger will allow them to offer customers a broader choice of products and services at a lower price.
However, Kathleen Sebelius, former U.S. Secretary of Health and Human Services, disagrees, especially because Anthem also wants to buy Cigna.
“I am concerned about the possibility that mergers of these companies will lead to less competition, which in historic perspective means higher prices and fewer choices,” Sebelius told the IBT. “To go from five major insurance companies to three insurance companies is a dramatically different playing field across the board, so this will impact every state, every population, just given the size of these mergers.”
Sebelius, a former Kansas governor and insurance commissioner, led the HHS under President Barack Obama and helped implement the Affordable Care Act. She is now the president and CEO of consulting firm Sebelius Resources.
Sebelius also told the IBT that “competition gives not only more choices to consumers but typically better prices.”
“Competition actually is a great price lever,” she said.
The proposed mergers previously had come under criticism from groups including the American Medical Association and presumptive Democratic presidential candidate Hillary Clinton.
Both mergers have been approved by shareholders but are still being scrutinized by federal antitrust regulators who want to make sure the deals do not materially decrease competition. —Boris Ladwig
Jack Daniel’s drafted to fight against White Walkers
Jack Daniel’s is getting some exposure — unwittingly — from the HBO fantasy show “Game of Thrones.”
Parts of the Brown-Forman brand’s logo seem to have been incorporated into T-shirts of some of the show’s major characters, including Jon Snow, the 998th commander of the Night’s Watch, and Hodor, so-named because the only “word” he ever says is “hodor.”
However, Brown-Forman said it had not been aware of the shirts, which are being marketed on social media, until contacted by IL.
“We have not authorized them and are checking into the issue,” a spokeswoman said via email. She also suggested that images featuring “Game of Thrones” actors wearing the apparel in question could have been photoshopped.
Too bad. We were hoping it was a clever marketing campaign to boost Jack Daniel’s sales by connecting it with one of the most talked-about TV shows.
Louisville company building $30 million affordable housing complex
Multi-family housing developer LDG Development is building a 216-unit, mostly affordable housing complex in Louisville’s East End.
The $30 million, 10-building complex called Bristol Bluffs will be geared toward families and will include a clubhouse with free Wi-Fi, a community center, computer lab and a playground.
“We very much believe that affordable housing should look as good as any market-rate housing,” said Chris Dischinger, co-founder of LDG Development. “Everybody deserves a quality place to live.”
The company chose the location near the juncture of Billtown Road and the Gene Snyder Freeway because a gas station and grocery store is being built across the street, two schools are nearby and it’s close to Bluegrass Industrial Park, Dischinger said.
“Affordable housing needs to be in all ZIP codes,” he said.
To help pay for the development, LDG Development has received $4 million from Louisville CARES, the city’s new affordable housing project. It also will use funding from the Kentucky Housing Corp. and tax-exempt bonds.
“It’s very hard to develop a project like this without the Louisville CARES money,” Dischinger said. “It’s great to be partnered with Metro and Kentucky Housing.”
Revenues from the 42 market-rate apartments included in the complex also will help cover the costs associated with operating and maintaining property, he said.
The units will be two and three bedrooms, and rates will range from $700 to $1,150 depending on whether they are affordable apartments or market rate.
Dischinger said his company hopes to break ground on the development in late summer or early fall. Construction will take roughly 15 months.
LDG Development has developed more than 5,000 affordable housing apartments in the United States, Dischinger said, including some in Louisville.
Kindred shares plunge after loan announcement
Shares of Louisville-based Kindred Healthcare fell nearly 3 percent in the first eight minutes of trading on Friday.
The hospital and nursing home operator had announced Thursday after markets closed that it plans to obtain a $200 million term loan to repay prior borrowings under its $900 million senior secured asset-based revolving credit facility.
The markets didn’t react well to that announcement. After the opening plunge, the stock price zigzagged as low as $11.45, down 5.6 percent, before recovering slightly.
Shares closed at $11.78 Friday, down 5 percent for the day. The S&P 500 and the Dow Jones fell by less than 1 percent.
Kindred also said it had obtained consent from the lenders to change provisions of its credit facilities, “including to allow for a broader range of joint venture activity.”
Kindred’s shares have fallen 44 percent in the last year. The Dow and the S&P have declined by less than 1 percent. Kindred’s stock price had fallen 19 percent on Nov. 5 after the company lowered its earnings outlook.
The company this year has made significant moves in its portfolio of nursing and rehabilitation facilities. —Boris Ladwig
New $10 million apartment complex under construction
Work recently began on a 14-building, 150-unit apartment development in the South End. The new complex, River Breeze South, is the sister project of River Breeze Apartments, located at 6807 West Page Lane, and will sit a few miles down the road.
“The product that we first built was just very popular, and there is still more demand,” said developer David Richardson, owner of David Richardson Builder.
The first 16 to 32 units will come online before the end of the year, he said, but the entire development won’t be finished until late 2017.
Similar to River Breeze Apartments, River Breeze South will include an exercise facility, a 2,397-square-foot business center and clubhouse with free Wi-Fi, a playground and a laundry facility in addition to the washer and dryer hook-ups in each apartment. It also will include 225 parking spaces.
Renters will be able to choose between a one-bedroom apartment and three different-sized two-bedroom apartments, Richardson said. The two-bedroom units also have two bathrooms.
Lil Cheezers owner opening deli in Old Louisville
Old Louisville residents want more retail, restaurants and businesses in general to help the historic neighborhood that has struggled in its attempts to revitalize.
While there hasn’t been a flood of new businesses — at least yet — Lil Cheezers owner Matt Davis has decided to make an investment in Old Louisville by opening a new restaurant called Slice.
Slice will be a 1980s-themed deli with menu items such as the Culture Club Sandwich, Fast Times at Roast Beef High, a Tang smoothie and apple pie, which will be offered Depeche a la Mode, according to Slice’s Facebook page. The menu also will include vegetarian, vegan and gluten-free options.
The restaurant, located at Second and Oak streets, doesn’t have an exact open date but is “coming soon.” Expect the music and decor to fit the theme. Slice will showcase the art of local artist Matt Barnes of Studio Post Office. —Caitlin Bowling
Better Business Bureau accepting nominations for its annual Torch Awards
Get your nods in for the local Better Business Bureau’s annual Torch Awards for Marketplace Ethics.
The BBB serving Louisville, Southern Indiana, and Western Kentucky each year honors businesses and nonprofits who stalwartly maintain good ethics, according to a news release.
Nominations will be accepted here until early September, and people can self nominate.
Businesses and nonprofits must have been in operation for at least three years and be in good standing with the BBB, but they don’t have to be BBB accredited. Charities also are required to demonstrate compliance with BBB Standards for Charity Accountability.
An independent panel of judges will evaluate all the entrants. The winners will be announced at noon on Nov. 10 at The Olmsted. Louisville Metro Councilman and historian Tom Owen is the keynote speaker.
Louisville, soccer club to get exposure on ESPN
Louisville and its professional soccer club, Louisville City FC, will get some national exposure on June 25 on ESPN3.
The team’s home game, at Slugger Field, against FC Cincinnati has been selected as the United Soccer League‘s Game of the Week.
The Louisville club said the match, which will kick off at 7:30 p.m., also will be shown in Louisville on MeTV, WLKY’s digital station, and on Time Warner Cable.
LouCity is first in the Eastern Conference, while Cincinnati is in third place. When the clubs met at Nippert Stadium on April 16, LouCity won 3-2.
The Cincinnati team has attracted huge crowds in its inaugural season, and local fans and team officials hope that, for the first time, they can attract more than 10,000 fans to a home game. —Boris Ladwig
Brown-Forman executive to retire
Louisville distiller Brown-Forman said that a senior executive will retire on Oct. 31.
Michael McShane, senior VP and managing director of Brown-Forman Australia, New Zealand and Southeast Asia (ANZSEA), has worked for the company for 17 years.
Brown-Forman said in a press release that McShane and his team have received coveted industry awards and in 2015 were named “Supplier of the Year” by the Australia Beverage Industry.
“Under Michael’s leadership, Jack Daniel’s has become Australia’s most valuable spirits brand based on share and value growth,” said Thomas Hinrichs, Brown-Forman president for Europe, North Asia and ANZSEA. “We congratulate Michael on his successful Brown-Forman career and wish him well in his future endeavors.”
McShane joined the Louisville distiller in 1999 as finance director based in Sydney after he had worked for Swift & Moore which at that time served as the Australian distributor for Brown-Forman brands. —Boris Ladwig