Despite a firm rejection from Cigna Corp. on its acquisition offer, Anthem Inc. is refusing to set aside ambitions to take over the company and form the nation’s largest health insurance provider.
Executives with the carrier announced Monday they would continue to court Cigna in hopes of reaching an agreement to merge, driver greater efficiency and affordability and gian a foothold in a market in flux.
“We have offered a clear, comprehensive and compelling offer,” Anthem CEO Joe Swedish said during conference call with investors.
Swedish said the offer made Sunday – roughly $184 per share, or $47 billion – was more than fair and that the combined company would generate $115 billion in annual revenue and serve more than 53 million across the country.
Cigna, however, has maintained that the offer is not fair and not in line with the “best interests” of Cigna shareholders.
In a letter rejecting the Anthem offer, Cigna executives expressed concern over a number of points associated with a potential deal, including a lack of growth strategy and issues with antitrust laws. Cigna also cited problems obtaining licensure from the Blue Cross and Blue Shield Association as well as the significant data breach Anthem suffered earlier this year.
Of utmost concern to Cigna is the proposal that Swedish take over as chairman, president CEO and head of integration – something company executives describe as “disconcerting and risky.” Instead, Cigna has pushed for its own CEO, David Cordani, to remain in the top position.
Anthem has not been accommodating of this request.
“We were stunned that the Cigna Board continues to insist on a guaranteed CEO position for Mr. Cordani over choosing to allow its stockholders to realize the significant premium being offered,” Swedish said over the weekend.
Under terms of the current proposal, Anthem executives would occupy 10 director positions on the board, while Cigna would occupy three.
Analysts have said that while Anthem is likely underbidding for Cigna, they are reasonably certain the deal will be consummated before the end of the year.
