Cigna Plans $10 Bln Buyback; Calls Off Reported Pursuit Of Humana

(RTTNews) - Cigna Group (CI) has increased its share buyback plan by $10 billion, amid a report that it has abandoned its bid to buy rival Humana Inc (HUM).

Cigna abandoned its pursuit to merge with Humana, which would have created a healthcare giant worth $140 billion, the Wall Street Journal reported on Sunday, citing people familiar with the matter.

The Journal reported that the deal fell through after Cigna and Humana couldn't come to agreement on price and other financial terms. Cigna is instead turning its focus to smaller acquisitions.

The Wall Street Journal reported in the previous month that Cigna and Humana were engaged in discussions about a cash-and-stock deal, with the possibility of finalizing it by the end of the year. If a deal materializes, it would encounter an antitrust environment concerned with consolidation in healthcare.

Meanwhile, Cigna said Sunday that its board approved an aggregate increase of $10 billion in incremental share repurchase authorization, bringing the company's total share repurchase authority to $11.3 billion.

Cigna plans to repurchase at least $5 billion of common stock between now and the end of the first half of 2024, with a portion of the repurchase to be executed via an accelerated share repurchase program conducted in the first quarter of 2024.

Cigna reaffirmed its outlook of full-year 2023 consolidated adjusted income from operations on a per share basis of at least $24.75 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $24.83 per share for fiscal year 2023. Analysts' estimates typically exclude special items.

The company continues to target consolidated adjusted income from operations on a per share basis of at least $28 for full-year 2024. Analysts expect annual earnings of $28.22 per share.

The company is confident in achieving its long-term annual adjusted earnings per share growth target of 10%-13% while also maintaining an attractive dividend.