Aetna Shareholders Sue Over $77B Proposed CVS Merger

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By Jennifer Bennett

Aetna Inc. faces a shareholder class action claiming the health insurer undervalued its stock in connection with its proposed $77 billion merger with CVS Health Corp.

Aetna allegedly misled shareholders about the company’s financial projections and its financial adviser’s valuation analyses, according to a suit filed Jan. 16 in the U.S. District Court for the District of Connecticut. The shareholders said Aetna issued the misleading statements to encourage shareholders to vote in favor of the merger.

Aetna’s existing shareholders will get $145 cash and just under one share of CVS stock for each share of Aetna stock, valuing Aetna at about $207.94 per share, according to the complaint. The shareholders said Aetna’s stock is worth much more based on external valuations and growth predictions. Aetna’s own financial adviser gave the stock an implied per-share equity value of up to $233, according to the complaint.

The complaint seeks either to delay the merger vote until the misleading statements are corrected or damages based on the undervaluation. An Aetna representative said the company doesn’t comment on pending litigation.

Aetna and CVS will need regulatory approval for the deal, announced in early December.

The case is Miramond v. Aetna Inc. , D. Conn., No. 3:18-cv-00083, complaint filed 1/16/18 .

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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