A Delaware judge on Wednesday issued a temporary restraining order blocking Cigna from immediately terminating its proposed merger agreement with Anthem.
The ruling comes after a federal judge last week blocked the proposed megamerger between Anthem and Cigna. Following that ruling, Cigna filed a lawsuit against Anthem seeking to unilaterally terminate the $54 billion agreement.
In the lawsuit, Cigna is seeking a declaratory judgement that it ended the merger agreement lawfully and requesting a judgement barring Anthem from further extending the merger agreement's termination date. According to the Wall Street Journal, Anthem could extend the deal through the end of April.
Cigna also is seeking the $1.85 billion breakup fee Anthem owes Cigna under their merger agreement if the deal does not proceed, as well as more than $13 billion in damages.
In response, Anthem on Wednesday countersued to block Cigna from terminating the deal. Anthem, which is also appealing the initial ruling that blocked the merger, alleged that Cigna has tried to "sabotage" the proposed merger and has "repeated[ly]" and "willful[ly]" breached the merger agreement.
Judge issues temporary restraining order
On Wednesday, Delaware Chancery Court Judge J. Travis Laster granted Anthem's request for a temporary restraining order.
Laster said a temporary ban would protect the "legal status quo" of the deal until he could further weigh the merits of the case. He added that Cigna's effort to immediately end the deal could harm Anthem through "the loss of a major transaction."
Under the restraining order, Anthem is free to continue its appeal of the federal court decision blocking the merger, Bloomberg/Health Data Management reports. According to Bloomberg/Health Data Management, Anthem wants a "fast-track" review from the appeals court so a final decision is made before an April 30 deadline on the merger agreement.
Cigna in a regulatory filing said, "This is not a decision on the merits of the case, but rather a procedural order to ensure irrevocable actions do not take place before the court's substantive review of the issues. Cigna respects the court's decision and will continue to abide by terms of the merger agreement until the court further reviews the case."
According to Cigna's regulatory filing, a hearing will be scheduled for the week of April 10, Cigna said (Kendall, Wall Street Journal, 2/16; Singer, Hartford Courant, 2/16; Bloomberg/Health Data Management, 2/16; Oliver, Becker's ASC Review, 2/16).
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