The uncertainties surrounding the merger intensified when Icahn exhorted shareholders not to approve it, after raising his stake in Cigna to about 5%. By opposing the deal, Icahn also courted a controversy as the majority of the investors were favoring the deal considering its benefits. The outcome of today’s vote was widely expected.
The uncertainties surrounding the merger intensified when Icahn exhorted shareholders not to approve it
A statement issued by Cigna revealed that nearly 90% of shareholders voted in favor of the transaction. According to sources, around 78% of Express Scripts shareholders gave a thumbs-up to it. However, before proceeding with the remaining formalities, the companies will have to wait until year-end, when the Department of Justice is expected to issue its verdict in the ongoing antitrust review.
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The proposal took shape about five months ago when the companies entered into an agreement, considering the benefits of going together such as better coordination and cost reduction for customers. Trouble started brewing when Express Scripts came under criticism from multiple quarters, including lawmakers and President Trump, who accused the company of being a party to the escalation of medicine prices.
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Soon, Icahn joined the campaign, claiming the purchase price was too big for the potential returns from the combined operation.
Cigna stock, which has been struggling to recover from the massive loss suffered earlier this year, remained in the red throughout Friday’s trading session. In contrast, Express Scripts gained about 17% since the beginning of the year and maintained the upward momentum so far, despite volatilities.
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