Carl Icahn abandons effort to kill Cigna’s Express Scripts deal

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Carl Icahn has given up on his try to sabotage Cigna’s takeover of Categorical Scripts.

The activist investor had known as on different Cigna (CI) shareholders to vote towards the $67 billion deal. He argued that the well being insurer is massively overpaying for a “extremely challenged” Categorical Scripts (ESRX), which faces existential dangers.

However Icahn’s push suffered heavy setbacks when influential shareholder advisory companies ISS and Glass Lewis each got here out in favor the takeover.

His agency Icahn Capital stated in an announcement late Monday that “in gentle of the ISS and Glass Lewis suggestions” it is dropping its efforts to steer shareholders to oppose the deal.

Associated: Carl Icahn says Cigna’s Categorical Scripts deal rivals ‘worst in company historical past’

Cigna agreed in March to purchase Categorical Scripts, one of many largest US pharmacy advantages managers, which administers drug plans for People with employer and authorities medical health insurance.

The well being insurer wants shareholder approval to shut the deal. It is holding a particular assembly on August 24 so shareholders can vote on it.

Icahn, who holds lower than 5% of Cigna inventory, set out his opposition to the deal final week in a letter to shareholders entitled “Cigna’s $60 billion folly.”

One of many dangers he pointed to is Amazon (AMZN), which lately bought on-line prescription drug firm PillPack. Icahn believes Amazon might in the future put Categorical Scripts out of enterprise.

carl icahn
Activist investor Carl Icahn

Icahn additionally stated within the letter that he was nervous concerning the Trump administration’s efforts to rein in drug prices, coupled with proposals to restrict the flexibility for drug producers to present rebates to pharmacy advantages managers reminiscent of Categorical Scripts, which is essential to their operations.

However ISS and Glass Lewis each stated they thought the deal made sense for Cigna’s technique and was “financially compelling.”

The merger might give Cigna extra management over drug costs, which is a significant concern for insurers. Rival insurer Anthem stated final 12 months that it could companion with CVS to start out its personal prescription drug plan supervisor. And UnitedHealth (UNH) already has its personal drug advantages supervisor, OptumRX.

— Jethro Mullen and Chris Isidore contributed to this report.

CNNMoney (New York) First revealed August 14, 2018: 12:37 AM ET

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