Published: Thu, March 08, 2018
Finance | By Loren Pratt

Express Scripts Holding Co Stock Soars on Cigna Corporation Deal

Express Scripts Holding Co Stock Soars on Cigna Corporation Deal

In December, CVS Health agreed to combine with Aetna in a $67.5 billion deal bringing together the largest USA drugstore chain and the third-biggest health insurer.

The boards of both companies have approved the deal, which is expected to close at the end of this year.

Express Scripts shares were up 8 percent at $79.29 on Thursday afternoon, but they were trading 12.6 percent below the current value of the bid, suggesting that some investors see difficulties closing the deal.

Cigna shares fell 10.2 percent to $174.45.

The companies said the combination will save $600 million due to administrative efficiencies.

Uber's also looking for a $1.25 billion leveraged loan on the heels of securing an investment from SoftBank. Colorado-based Milestone Gru has invested 0.03% in Express Scripts Holding Company (NASDAQ:ESRX).

"Cigna's acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers", said Cordani.

PBMs administer prescription drug programs for health insurers, self-insured companies and government agencies, negotiating deals with drug manufacturers, working with pharmacies and processing claims. Cigna sued Anthem in February 2017 for a $1.85 billion break-up fee plus $13 billion in damages resulting from the failed merger attempt, and Anthem countersued. Ameriprise Financial Inc. now owns 5,233,327 shares of the company's stock valued at $331,374,000 after purchasing an additional 996,816 shares in the last quarter.

Health insurance giant Cigna is acquiring pharmacy benefits manager Express Scripts.

Leerink Partners analyst Ana Gupte said the deal may surprise investors since Cigna has said that it is satisfied with their PBM arrangement with UnitedHealth's Optum unit. Oregon Employees Retirement Fund has invested 0.21% in Express Scripts Holding Company (NASDAQ:ESRX). The combined company's name will be named Cigna.

"Having two simultaneous deals significantly raises the risk", said David Balto, an antitrust lawyer with expertise in the health industry. The deal is created to give Cigna a competitive advantage-or at least a fighting chance-amid a series of big moves in the PBM market by heavy-hitters looking to rein in rising costs as the healthcare industry's landscape keeps shifting. "I think there's a significant risk that both deals get challenged".

"First and foremost, we believe this transaction delivers attractive value to the Express Scripts shareholders" said Tim Wentworth, President and Chief Executive Officer of Express Scripts.

The bank highlighted a potential for channel conflict within Express Scripts' health plan book of business. The deal will have holders of ESRX stock owning 36% of the new company and CI shareholders owning the remaining 64%. Separately, a judge also blocked a $37 billion deal between the health insurers Aetna and Humana previous year.

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