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Cigna shares jump on reports of abandoned Humana buyout, plans for $10 billion stock buyback
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Shares of Cigna jumped Monday following reports that the health-care giant has scrapped its plans to buy rival Humana due to disagreements on price, putting an early end to what would have been one of the largest deals of the decade.
Cigna late Sunday also announced plans to buy back $10 billion worth of shares, bringing its total planned repurchases to $11.3 billion. The company said in a release that it will consider smaller, “bolt-on” acquisitions in the near term, but did not confirm the reports about its abandoned pursuit of Humana.
Cigna’s stock popped about 17% on Monday morning, while shares of Humana were down more than 2%.
Spokespeople for Cigna and Humana did not immediately respond to CNBC’s requests for comment on the called-off merger, which was first reported by The Wall Street Journal on Sunday.
Cigna and Humana couldn’t agree on price and other financial terms of the deal, which would have created a health-care conglomerate with a value exceeding $140 billion, sources familiar with the matter told the Journal.
That tie-up would have likely attracted fierce antitrust scrutiny. Shares of the companies fell sharply in late November after the Journal first reported that they were discussing a merger.
But Cigna continues to believe in the merits of a tie-up with Humana, the Journal reported Sunday. The combined company would have been focused on improving access to care and lowering costs for consumers, sources told the Journal.
Jefferies analyst David Windley upgraded shares of Cigna to buy from hold in a Sunday research note, saying the abandoned Humana deal is a “short-term win” for Cigna investors.
He added that “taking advantage of a negative reaction to deal reports” by announcing its stock buyback plan on Sunday is “music” to Cigna shareholders’ “value-sensitive ears.”
Windley noted that shares of Cigna have been down sharply since Nov. 6, when reports emerged about the company exploring a sale of its Medicare Advantage business, which manages government health insurance for people age 65 and older.
Investors interpreted that potential sale as a “step to reduce its antitrust exposure in a deal to acquire” Humana, Windley said.
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Prince Harry receives fresh blow after losing court battle
Prince Harry, who’s suing ANL over an article concerning his legal battle with the Home Office about his security, has been ordered to pay the Mail on Sunday more than £48,000 after losing court battle.
Justice Nicklin ruled that the publisher had a “real prospect of demonstrating that an honest person could have held the view” that a statement released by the Duke’s representatives was “a masterclass in the art of spinning”.
The judge has ordered Harry to pay the £48,447 legal costs incurred by Associated in relation to that “summary judgment application” by Dec 29.
Harry’s bid to strike out the newspaper’s “honest opinion” defence was heard in March.
The Duke’s lawyer Justin Rushbrooke KC, in written submissions, argued that the newspaper’s defence should be thrown out because it “rests upon two provably false premises” relating to a press statement released by the Duke when he made the legal challenge.
Associated has argued that the article, which claimed the Duke’s PR team had “tried to put positive spin on the dispute”, expressed an “honest opinion” and did not cause the royal “serious harm”.
The Mail on Sunday and Mail Online published an article in February 2022, claiming Harry tried to hide his efforts to retain publicly funded protection in the UK after giving up his status as a working member of the royal family in 2020.
The government, meanwhile, has defended its decision to withdraw full protection for the Duke of Sussex because he stepped down from his role as a senior working member of the Firm. It said he was treated fairly and provided with security occasionally when he visits.
