Topic: How To Invest

Spinoffs, Takeovers and Special Situations Hotline – Friday, August 10, 2018

Article Excerpt

CIGNA CORP., $183.28, symbol CI on New York, provides insurance products and services, including medical, dental, disability, life, and accident policies. That insurance is available through employer-based, government-sponsored, and individual-coverage arrangements. In March 2018, Cigna announced that it would pay $67 billion to acquire pharmacy benefits manager Express Scripts, symbol ESRX on Nasdaq. The offer is for $48.75 a share in cash and 0.2434 shares of Cigna. Pharmacy benefits managers negotiate discounts from drugmakers so their clients—employers—can provide drug benefits to their workers with less cost. Activist investor Carl Icahn has taken a position in Cigna and is now encouraging shareholders to vote against the deal on August 24. Icahn feels the company is paying too much for the pharmacy benefits manager. He argues that Express Scripts faces significant hurdles, including the possibility that the Trump government will target middlemen like Express Scripts to lower healthcare costs. As well, earlier this year, Amazon.com, symbol AMZN on Nasdaq, paid just under $1.0 billion to buy online…