Anthem’s latest court loss means Cigna deal is all but dead   – The Denver Post


By Jef Feeley, Zachary Tracer and David Mclaughlin, Bloomberg News

Anthem Inc. is pretty much out of chances to hang on to Cigna Corp.

A Delaware judge’s ruling late Thursday that Cigna can walk away from the $48 billion health insurance merger leaves few options for Anthem. While Anthem can still appeal the latest ruling, it’s far more likely that the companies will be left fighting over who’s to blame.

“The only surprise here is that it took so long to reach an ending that the market had long anticipated,” said Michael Newshel, an analyst with Evercore ISI.

Thursday’s ruling means Anthem could be on the hook for $1.85 billion in breakup fees and $13 billion in damages to Cigna, which had argued that its would-be partner was too stubborn to see that the concerns about competition were insurmountable. Anthem has countersued Cigna over the deal’s demise.

Delaware Chancery Judge Travis Laster said Anthem didn’t deserve a 60-day extension of an earlier order barring Cigna’s exit because it was “incredibly unlikely” that the company could close the deal. However, the judge said there was significant evidence Cigna may have violated the merger agreement by dragging its feet on antitrust concerns, which could entitle Anthem to “potentially massive damages.”

Laster gave Anthem until Monday at noon Eastern time to decide whether to appeal his decision. Bonnie Jacobs, an Anthem spokeswoman, didn’t respond to requests for comment by email and telephone.

“The reality is both parties probably have some risk and they’ll bargain for something between zero and $1.85 billion,” said Matt Cantor, an antitrust lawyer at Constantine Cannon.

The loss is the latest for Anthem’s effort to preserve the takeover, which was blocked this year by a federal judge on antitrust grounds. Anthem is asking the U.S. Supreme Court to overturn a ruling finding the deal flawed, though the court is unlikely to weigh in now that Cigna has been allowed to walk.