Court Issues Temporary Order Keeping Cigna From Terminating Merger With Anthem
February 16 2017 - 9:46AM
Dow Jones News
By Brent Kendall
A Delaware judge on Wednesday issued a temporary restraining
order that blocks Cigna Corp. from immediately terminating its
troubled $48 billion merger with rival health insurer Anthem
Inc.
The development is the latest in what could be a long and bitter
legal battle between the two companies in the wake of a federal
judge's ruling earlier this month that the proposed merger violates
U.S. antitrust law.
Cigna on Tuesday declared it was done with the merger and sued
Anthem, seeking a $1.85 billion breakup fee plus more than $13
billion in damages from its deal partner. Anthem then responded
with its own lawsuit and sought an immediate order stopping Cigna
from ending their pact.
Anthem obtained such an order Wednesday from Vice Chancellor J.
Travis Laster, a judge on the Delaware Chancery Court, according to
a Thursday filing by Cigna with the Securities and Exchange
Commission.
Under the terms of the merger agreement, Anthem could extend the
deal until the end of April. The firm is making a long-shot bid to
win a quick appeal of U.S. District Judge Amy Berman Jackson's
ruling that the merger would unlawfully harm consumers and
competition.
Both Anthem and Cigna have accused one another of violating
their 2015 merger deal. Cigna said Anthem's alleged violations
meant it couldn't extend the merger agreement until April. Anthem
said Cigna has been engaged in a campaign to sink the deal.
Cigna in a statement said, "This is not a decision on the merits
of the case, but rather a procedural order to ensure irrevocable
actions do not take place before the court's substantive review of
the issues. Cigna respects the court's decision and will continue
to abide by terms of the merger agreement until the court further
reviews the case."
The insurer said another hearing will be scheduled the week of
April 10.
Anthem didn't respond to a request for comment on the
restraining order.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
February 16, 2017 09:31 ET (14:31 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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