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Icahn relies on Cigna-Express Scripts deal



Carl Icahn

no votes

Cigna
Corp.


CI -0.83%

Shareholders buy the health insurance company's $ 54 billion deal

Hold express scripts
Co.


ESRX 0.45%

After two proxy advisory firms advised shareholders to support the transaction, the billionaire activist said in a statement on Monday.

Significant overlaps between the two companies, He hoped that had decreased since the announcement of the deal. This was also a factor in his decision.

Even before the proxy advisers Institutional Shareholder Services and Glass Lewis have recommended in recent days that shareholders support the transaction, Icahn faced a tough fight. He publicly criticized the deal long after the record date, which meant he could not recruit anyone else to resist him.

And his position in Cigna was about 0.56% of the company so he would do it I had to gain a lot of support. He also held a short position in Express Scripts, which meant he relied on the stock's loss in value.

Another prominent hedge fund, Glenview Capital Management LLC, came out in support of the deal last week. The fund, which has a $ 1

.3 billion stake between the two companies, said the deal would save companies' clients billions of dollars each year.

Cigna said that Icahn did not understand the dynamics of health care and seemed to bet against the deal with a profit. He described his opposition last week in a statement as "misguided and short-sighted"

. Icahn said in his statement that he informed the Securities and Exchange Commission that he would no longer ask for proxies to vote against the transaction.

The shareholders of both companies will vote on August 24th.

Proxy Advisory Firms "Opinions have a significant impact on shareholders, as companies rarely recommend their clients, including large institutional investors, to vote against planned mergers, and large institutional shareholders are often in agreement with the opinions of shareholders Proxy Advisory Firms.

Mr. Icahn's closing concerns included the competitive risk of

Amazon.de
Inc.

and notes from the Trump administration that it might limit the manufacturer discounts for pharmacy slope managers such as Express Scripts.

Cigna and Express Scripts have announced that their merger announced in March will expand their healthcare offerings and help them control their costs. The deal enters a furious consolidation round in which healthcare companies seek a more cost-effective supply and fend off increased competition from Amazon.com Inc. and others.

Write to Cara Lombardo at cara.lombar[email protected]


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