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Activist investor Carl Icahn has built a sizable stake in Cigna Corp. and plans to oppose the health insurer’s $54 billion takeover of pharmacy-benefits firm Express Scripts Holding Co., according to people familiar with the matter.

Chief among Icahn’s concerns is that Amazon.com Inc.’s entrance into the prescription-drug industry could threaten Express Scripts’s business there over time, said the people. The size of the billionaire’s stake is somewhere below the 5% threshold that would require him to disclose it, said the people, who asked not to be identified because the matter is private

Express Scripts shares fell 6.3% to $74.44 at the close in New York, the biggest one-day drop since April 2017. Cigna climbed 2% to its highest price since March.

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With the moves, there’s now a 25% difference between where Express Scripts is trading and the agreed-upon takeover price — the third-widest gap of any of the pending deals being monitored by Bloomberg.

Icahn, 82, has spoken to other investors who also think Cigna should walk away from the deal because Express Scripts is unlikely to add value to the company, the people said. Cigna shareholders are scheduled to vote on whether to approve the merger on Aug. 24. Terminating the deal would require Cigna to pay a fee to Express Scripts of as much as $2.1 billion, according to a filing.

Brian Henry, an Express Scripts spokesman, said that “our combination with Cigna will deliver significant value to shareholders and position our companies to continue transforming health care.”

Representatives for Icahn declined to comment on the stake, which was reported earlier by the Wall Street Journal. Matthew Asensio, a Cigna spokesman, didn’t respond to requests for comment.

Cigna, a major provider of health insurance to companies, agreed in March to pay about $54 billion in cash and stock for Express Scripts, which helps insurers and employers manage their prescription drug benefits. The goal was to streamline different parts of the health care system by bringing them under one roof, saving money for clients of the combined firm.

Under Pressure

Express Scripts is the largest stand-alone pharmacy benefit manager, and managed about 1.4 billion prescriptions last year for its insurer and employer clients. Investors were wary of the deal from the start, and since the deal was announced the threats to Express Scripts’s business have only increased.

The Trump administration has targeted the business model of PBMs, which are intermediaries in the drug-supply business, as it works to lower prescription-drug prices. In June, Amazon signaled its entrance into the U.S. drug business by agreeing to pay $1 billion to buy online pharmacy PillPack, which sends customers their drugs in the mail. Express Scripts has a large mail-order operation.

“Express Scripts was a very controversial asset as the last remaining standalone PBM and we believe many investors were surprised by the deal in the first place,” said Ross Muken, an analyst with Evercore ISI. “We expect a full debate to now tick-up regarding the merits of the deal.”

Also on Wednesday, Express Scripts announced its second-quarter earnings results, results that will be closely watched for the company’s health heading into the vote. The company said it expects to retain 97.5% to 98.5% of its customers next year, up from the 96% to 98% projection it gave in February.

However, prescription claims — a key measure of business volume — declined 3.5% in the quarter after the company lost several government clients. Express Scripts said in the release that it expects to complete the Cigna merger to be complete by the end of the year.

Busy Year

Opposing the deal is the latest in a busy year for Icahn. Xerox Inc. walked away from its proposed $6.1 billion takeover by Fujifilm Holdings Corp. in May after Icahn and fellow billionaire Darwin Deason came out in opposition.

He also successfully got a higher price in June for the proposed take-private transaction at AmTrust Financial Services Inc. after Icahn came out against the original terms of that deal. That fight followed on the heels of him successfully blocking Sandridge Energy Inc.’s proposed takeover of Bonanza Creek Energy Inc. before winning five of eight seats on Sandridge’s board in June.

Icahn also won three seats on the board of Crock-Pot maker Newell Brands Inc. — a fight that not only saw him scrap with the company but also with fellow activist Starboard Value.

— Read Amazon’s PillPack Deal Scares Investors From Health ETFon ThinkAdvisor.

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