Prominent investor Carl Icahn announced on Monday that he will no longer encourage shareholders to vote against Cigna’s acquisition of Express Scripts on Aug. 24.
In a brief statement, Icahn said he made this decision in light of recommendations from two proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis.
ISS called the proposed merger a "financially compelling transaction," even as analysts acknowledged that the environment for pharmacy benefit managers has changed substantially since the deal was announced in March.
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Glass Lewis said the move would bring Cigna a host of benefits—namely, it would allow the insurer to more effectively “serve consumers, adapt to competitive and structural challenges, respond to regulatory changes, capitalize on growth opportunities and potentially realize significant incremental cost savings and operational efficiencies."
With Icahn backing down, the deal appears all but assured to pass a shareholder vote next week.
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Before Icahn announced his retreat, he and Cigna traded harsh words with one another. Icahn called the potential acquisition “inexplicably ridiculous” earlier this month and suggested the merged company could not compete with Amazon.
Cigna retorted by saying this opposition is “value destructive,” “misguided and shortsighted,” and “motivated by a desire to profit off of his ‘substantial short position’ in Express Scripts.”