Express Scripts Holdings Co (NASDAQ: ESRX) is having an overwhelmingly strong start to the trading session in the pre-market hours this morning, and for good reason. Recently, news started to hit the tape that the company would soon be acquired. Of course, this led to excitement among investors, sending the stock screaming for the top. Today, we’ll talk about the acquisition, what we’re seeing from the stock, and what we’ll be watching for with regard to ESRX ahead.
CI To Acquire ESRX
As mentioned above, Express Scripts is having an incredibly strong start to the trading session this morning after announcing that it has entered into a definitive agreement to be acquired. According to a press release issued early this morning, the company has entered into a definitive agreement under which it will be acquired by CIGNA Corporation (NYSE: CI). In the release, ESRX said that the transaction will be a mix of stock and cash, with a total value of around $67 billion. The price will be paid via $48.75 in cash and 0.2434 shares of stock of the combined company per ESRX share. In a statement, David, M. Cordani, President and CEO at CI, had the following to offer:
Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers… This combination accelerates Cigna’s enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities. Together, we will create an expanded portfolio of health services, delivering greater consumer choices, closer alignment between the customer and health care provider, and more personalized value. This combination will create significant benefits to society and differentiated shareholder value.
The above statement was followed up by Tim Wentworth, President and CEO at ESRX. Here’s what he had to say:
First and foremost, we believe this transaction delivers attractive value to the Express Scripts shareholders… Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve. Adding our company’s leadership in pharmacy and medical benefit management, technology-powered clinical solutions, and specialized patent care model to Cigna’s track record of delivering value through innovation, we are positioned to transform healthcare. We will continue to have a distinct focus at Express Scripts and eviCore on partnering with health plans, and together, build tailored solutions for health plans and their members. Importantly, this agreement is a testament to the work of our team and their resolute focus on providing the best care to patients, and the most value to clients.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news surrounding Express Scripts proved to be overwhelmingly positive. After all, the acquisition will drive immediate value for the company’s shareholders. So, it’s no surprise to see that the stock is making a run for the top this morning. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (7.30), ESRX is trading at $87.10 per share after a gain of $13.68 per share (18.63%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ESRX. In particular, we’re interested in following the story surrounding the acquisition, as it is still subject to customary closing conditions as well as regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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