Cigna Near Deal to Buy Express Scripts, WSJ Says
- Author: Anthony Vega Mar 19, 2018,
Mar 19, 2018, 0:15
The Cigna-Express Scripts deal is also Cigna's first merger attempt since the federal government past year successfully blocked its proposed deal with rival insurer Anthem. The stock traded within a range of $72.51 and $74.34. Until then, both the companies would continue to function as independent firms.
Shares of Express Scripts have surged over 10% as of Thursday afternoon on the deal, which some on the Street see as spelling equally bad news for Amazon. His Express Scripts counterpart, Tim Wentworth, will stay on as a president.
With a full portfolio of medical, behavioural, specialty pharmacy and other health engagement services across a wide array of retail and online distribution channels, the combined company will be able to deliver superior services while also driving long-term value creation for shareholders, Cigna said. "Adding our company's leadership in pharmacy and medical benefit management, technology-powered clinical solutions, and specialized patient care model to Cigna's track record of delivering value through innovation, we are positioned to transform health care".
3/8/2018-Jefferies Group was Downgraded by analysts at Jefferies Group from a "Buy " rating to a " Hold" rating.
As far as the funding, Cigna plans to use its cash on hand, assumed debt of Express Scripts and fresh issuance of debt.
Cigna's offer consists of $48.75 in cash and 0.2434 shares of stock of the combined company for each Express Scripts share, amounting to $96.03 per share - a premium of almost 31% to Express Scripts' Wednesday closing price. This showed a surprise of 3.3% in the last quarter earnings. The company raised its EPS target for 2021 to $20-$21 per share from $18. The company had revenue of $25.38 billion for the quarter, compared to analyst estimates of $25.07 billion. By 2020, it's predicted to blast through the roof to $47 billion. Cowen & Co upgraded Express Scripts Holding Company (NASDAQ:ESRX) rating on Monday, April 4. In this particular case, the news surrounding Express Scripts proved to be overwhelmingly positive. Plus, the average 12-month price target of $236.29 stands at a 26% premium to CI stock's present perch. Massachusetts Services Company Ma holds 0.17% or 6.31M shares. The return on assets stands at 8.7%, Return on Equity now is 27.5% and the Return on Investment value is 19%.
Express Scripts Holding (ESRX) opened at $84.60 on Thursday. The stock is now moving below its 20-Day Simple Moving Average of -2.12% with a 50-Day Simple Moving Average of -4.54 percent. While this retreat found a foothold atop Cigna's 180-day moving average, it has breached this foothold in today's pullback. The 1-year high was reported on Mar, 8 by Barchart.com.
The company's stock is now moving with a +ve distance from the 200 day SMA of approximately 11.2%, and has a solid year to date (YTD) performance of -1.63% which means that the stock is constantly adding to its value from the previous fiscal year end price.