Cigna, Anthem trade barbs over 'deeply disappointing' takeover bid
Editor's Note: In addition to the Anthem-Cigna proposed merger, Aetna in the past few days made a takeover offer to Humana, the Wall Street Journal reported.
Cigna officially rejected Anthem's takeover bid on Sunday, saying its board of directors is "deeply disappointed" with Anthem's recent negotiating tactics amid increasingly tense talks between the two health insurers.
Cigna has rebuffed at least two previous takeover offers from its larger competitor. The offer that Anthem publicly announced Saturday--the only one Cigna confirmed--was $184 a share, according to a statement from Anthem.
But Cigna's board was not impressed. It unanimously voted to reject the offer, according to a statement emailed to FierceHealthPayer. It also expressed disappointment with the direction the negotiations between the two companies had taken.
"We are deeply disappointed with your recent actions," states a letter from Cigna's board of directors to Anthem's board and provided to FierceHealthcare. "We have been engaged in good faith discussions with Anthem to determine whether a potential strategic combination is in the best interests of Cigna's shareholders."
While a merger between the two entities had the potential to benefit both, according to the letter, Cigna also has some major concerns about Anthem that have driven its reticence to agree to a deal.
Among its concerns, Cigna cites Anthem's lack of a growth strategy, complications regarding its membership in the Blue Cross Blue Shield Association and related antitrust actions, the massive data breach the company experienced in February and Anthem's proposed governance structure.
"Your insistence that one person (Joseph Swedish) assume four roles, including Chairman of the Board, CEO, President, as well as Head of Integration, is disconcerting and risky," the response read. "Your proposal raises very serious questions regarding your views on proper governance, board oversight and risk management and underestimates the complexity of combining our organizations."
Unfortunately, Cigna wrote to Anthem's board, "you have continued to avoid addressing these key concerns and have failed to demonstrate what has changed over the past few months."
In Anthem's statement, CEO Joseph Swedish expressed frustration with the refusal of Cigna's board to agree to a deal.
"We are disappointed that Cigna's insistence on uncommon governance demands has impeded the realization of this combination for shareholders and all stakeholders," he said.
Anthem and Cigna are not the only insurers considering consolidation. Last week news broke the UnitedHealth Group had attempted to take over Aetna, and Humana remains a ripe target for acquisition.
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