Cigna believes a merger with Anthem would create a health insurance powerhouse, but the Connecticut-based insurer is still rejecting a $53.8 billion takeover bid from its larger rival, saying the offer is not in the best interest of shareholders.
"We are deeply disappointed with your recent actions," the company wrote in a letter signed by Cigna CEO David Cordani and Chairman Isaiah Harris, rebuking Anthem's board for taking their discussions public over the weekend.
"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," the letter added.
On Saturday, Anthem confirmed the two had been in serious talks since late May, even as it declared it was "frustrated" with Cigna's demands. The company revealed it had raised its offer to $184 a share, after Cigna rejected three prior offers starting on June 3rd. The offer represents more than a 35 percent premium to Cigna's May 28th close, when the firms began discussions in earnest.
Anthem CEO Joseph Swedish pointed the finger at Cordani and Cigna's board for insisting on retaining control of the combined firm—demands he was actually willing to meet. Swedish said Cordani would be named Chief Operating Officer of the combined firm, and Cignas would get 6 seats on the 14-member board.
"Despite the compelling aspects of these proposals, you continued to insist that Mr. Cordani be immediately appointed CEO of the combined company, or that we reach an acceptable position for his specific roles and responsibilities as well as the timing for a transition to CEO," Swedish wrote in a letter released Saturday.
In addition, Cigna demanded "that there be an almost equal Board split of directors in the combined company and that certain changes related to senior leadership changes," he added, a request that was apparently unacceptable to Anthem.
"I certainly have heard this from shareholders of both Anthem and Cigna, that most obvious successor to Swedish in an Anthem/Cigna combination is Cordani," said Leerink analyst Ana Gupte. "He has to just trust himself that would get that role," she said.