August 2, 2018

Cigna silent on activist investor Icahn's deal threat

HBJ File Photo
HBJ File Photo
Cigna headquarters in Bloomfield.

Bloomfield health insurer Cigna held a conference call with investors Thursday to discuss its second-quarter results, boasting about a 10 percent increase in revenues.

But the insurer's top executives were noticeably tightlipped about a report published earlier this week that said activist investor Carl Icahn, who has a sizable stake in Cigna, is looking to block the insurer's bid to acquire pharmacy benefits manager Express Scripts for $67 billion.

Icahn reportedly believes Cigna is paying too much for Express Scripts and will urge shareholders to oppose the deal. Icahn is also wary of the new company competing with Amazon, which is increasingly interested in the pharmacy business, the Wall Street Journal reported. He is also worried about a federal proposal to limit pharmacy benefits managers' rebates.

Shareholders are set to vote on the proposed merger later this month.

During the conference call, Cigna executives didn't address the potential deal interference.

Instead they focused on the company's second-quarter results, which included a slight drop in net income despite a 10 percent jump in revenue as it grew its customer base across several business lines.

For the quarter ended June 30, the insurer posted net income of $806 million, or $3.2 a diluted share, vs. $813 million, or $3.1 a diluted share, from the year-ago period.

Cigna's revenue totaled almost $11.5 billion, up 10 percent from the $10.4 billion netted in the same quarter in 2017.

Cigna raised its full-year earnings outlook to the range of $13.60 to $13.90 per share.

A CNNMoney report was included in this story.

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