NEW YORK (Reuters) - WageWorks Inc, an administrator of employee benefits, confirmed on Monday that HealthEquity Inc, a U.S. custodian of health savings accounts, had offered to acquire it.
A deal would represent the boldest bet yet of HealthEquity Chief Executive Jon Kessler, a benefits taxation specialist who founded WageWorks in 2000 before joining HealthEquity in 2009. It would create a larger administrator of consumer-directed health, commuter and employee benefit plans.
There is no certainty that talks between HealthEquity and WageWorks will result in a deal, said people familiar with the matter, asking not to be identified because the matter is confidential. Details of HealthEquity’s offer could not be learned.
“The WageWorks Board of Directors, in consultation with its financial and legal advisors, will continue to carefully review the proposal,” WageWorks said in a statement, after Reuters first reported of HealthEquity’s bid.
HealthEquity, which has a market capitalisation of $4.6 billion, did not respond to requests for comment. WageWorks is valued at about $1.7 billion (£1.3 billion).
WageWorks shares jumped 18 percent to $51.02 in afterhours trading in New York on the news on Monday. HealthEquity shares dropped 4.1 percent to $69.94.
Based in Draper, Utah, HealthEquity offers a platform that connects 141 health, retirement and other benefit plan providers with employees at more than 45,000 companies. It is responsible for about 4 million health saving accounts.
Based in San Mateo, California, WageWorks administers pre-tax spending accounts, such as health savings accounts, as well as commuter benefit services, including transit and parking benefits and wellness programs.
Last year, WageWorks replaced its CEO and top management after announcing it had improperly reported some earnings figures and had to restate its financial results. The CEO role is now held by Edgar Montes, who joined WageWorks in 2006 from American Express Co.
Reporting by Greg Roumeliotis in New York, additional reporting by Maria Ponnezhath in Bangalore; editing by Bill Rigby, Sonya Hepinstall and Rashmi Aich