Cigna Corp.’s chief executive officer and board used “black-ops style” tactics in a covert campaign to “blow up” a $48 billion merger with rival insurer Anthem Inc., Cigna investors claim in a lawsuit.
A Massachusetts-based pension fund alleges that Cigna CEO David Cordani sought to “poison” the deal after failing to secure the top post in the merged company. He hired lawyers and public relations specialists to help in a “Trojan Horse” campaign, the fund claims. The deal, which would have created the largest U.S. health insurer, collapsed in 2017.
“The board supported his sabotage and placed Cordani’s personal interests over the best interests of the company” in order “to protect their jobs at the expense of shareholders,” according to the lawsuit, filed under seal on Nov. 17 in Delaware Chancery Court and made public on Monday.
Representatives of Cigna, based in Bloomfield, Connecticut, and Indianapolis-based Anthem didn’t immediately return emails seeking comment on the suit.
‘Trojan Horse’ Campaign
The Massachusetts Laborers’ Annuity Fund is seeking unspecified damages to be returned to the company on behalf of all Cigna investors. Such derivative lawsuits, as they’re called, typically target directors for failing to properly oversee operations.
The fund claims that Cordani hired the public relations specialist Teneo, which it also names as a defendant, to scuttle the merger while making it look like Cigna was working to consummate it.
“Throughout this litigation, Cigna’s fiduciaries took pains to hide their disloyalty, such as making misleading public statements” and “proffering non-credible testimony,” according to the suit.
Teneo was tasked with making targeted leaks to news media portraying Anthem’s efforts to win antitrust clearance as bumbling, the pension fund alleges. Cordani and board members worked to keep the “Trojan Horse” campaign a secret, according to the complaint.
Representatives of Teneo didn’t immediately return calls and emails seeking comment on the lawsuit.