Cigna Announces $2 Billion Accelerated Stock Repurchase Agreements
Global health services company Cigna Corporation (NYSE: CI) will repurchase $2.0 billion of common stock through accelerated stock repurchase agreements (the “ASR Agreements”) with each of Morgan Stanley & Co. LLC and JPMorgan Chase Bank, N.A. (the “Counterparties”). The ASRs are part of Cigna’s existing share repurchase program, which had remaining authority of $3.8 billion as of August 4, 2021.
“Today’s announcement is further evidence of the confidence of the management team and our Board of Directors in Cigna’s financial strength and long-term growth strategy,” said David M. Cordani, President and Chief Executive Officer. “This accelerated share repurchase is consistent with our commitment to return a significant amount of capital to shareholders. When combined with our previously completed share repurchase and a greatly increased dividend, we will have returned more than $7 billion of capital to shareholders in calendar year 2021.”
Under the terms of the ASR Agreements, Cigna will receive an aggregate initial delivery of approximately 7.7 million shares of Cigna common stock in exchange for a prepayment of $2.0 billion. The specific number of shares that Cigna ultimately will repurchase pursuant to the ASR Agreements will be based generally on the daily volume-weighted average share price of Cigna common stock over the term of the ASR Agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreements. Final settlement under the ASR Agreements is expected to occur in the fourth quarter of 2021. The ASR Agreements contain provisions customary for agreements of this type, including provisions for adjustments to the transaction terms upon certain specified events, the circumstances generally under which final settlement of the ASR Agreements may be accelerated or extended or the ASR Agreements may be terminated early by Cigna or the Counterparties, and various acknowledgements and representations made by the parties to each other. At final settlement, under certain circumstances, Cigna may be entitled to receive additional shares of Cigna common stock from the Counterparties or Cigna may be required to make a cash payment or, if Cigna elects, deliver shares of Cigna common stock to the Counterparties. All of the shares of Cigna common stock delivered to Cigna under the ASR Agreements will be held in treasury or retired.