Larry Robbins Diagnoses Carl Icahn With ‘Ackmania’

The Cigna-Express Scripts deal is turning Uncle Carl into his worst enemy.
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I forgive you again, Carl.

I forgive you again, Carl.

During his long, frustrating, ultimately fruitless and extremely costly crusade against diet-shake purveyor Herbalife, Bill Ackman displayed a range of indicators that scientists have come to see as symptoms of what they have come to call “Ackmania”: Long, detailed presentations that should move markets but don’t, or move them in the wrong direction; pre-hyping those announcements; increasingly desperate and unhinged-sounding pronouncements; refusal to back down in the face of overwhelming odds; the presence of apparently convincing analysts; unrequitedreliance on others to do what he cannot; refusal to engage directly with the problem; enormous scorn, ridicule and ultimately pity on the part of peers; and finally disastrous and humiliating failure.

Many of the above symptoms were first noticed—and, indeed, exacerbated—by Carl Icahn, whose parents wanted him to become a doctor and who now has his name on a medical school. In his studies, however, Icahn may have gotten a little too close to the subject, probably during their awkward televised hug, and in his attack on Cigna’s planned $54 billion merger with Express Scripts, Larry Robbins and others are noticing that Icahn is showing the early signs of an acute case of Ackmania.

"Sensationalist headlines and intentionally misleading assertions from those with conflicting interests and limited analysis should not carry more weight than balanced diligence," Robbins said….

"We believe that Cigna shareholders, including Mr. Icahn, would be hard pressed to explain how saving customers and payors so much money is harmful to society and the communities they serve, and that perhaps Mr. Icahn has been misled by misinformation fed to him by analysts with short-term personal agendas," Robbins said.

Cigna said Icahn "does not represent the interests of Cigna shareholders" and that his opposition "demonstrates a complete lack of understanding of Cigna's business model."

"We're disappointed that he chose that, his means of communication was an open letter," Cordani told CNBC's "Squawk on the Street." "There's been no inbound [communication] to our corporation…."

"We're committed to this really attractive strategic and financial combination," Cordani said.

Institutional Shareholder Services, one of two major proxy-advisory firms, is recommending that Cigna shareholders support the deal in a vote later this month….

In a sign of worsening or even full-blown Ackmania, however, Carl Icahn is undeterred, perhaps because the key underlying condition of the illness—being right—tends to increase the derangement.

Cigna’s letter yesterday was full of platitudes, self-praise and obfuscations…. the ridiculous mantra that Express Scripts makes very little money from rebates…. The major reason Express Scripts can charge huge fees to their clients is that it is the only way they can obtain these rebates. Companies I control spend over $3 million a year in fees to Express Scripts. I would never pay the egregious amount they charge if we did not get back 95% of the rebates….

Ask yourself before you vote – why should Cigna pay $60 billion for the privilege of taking on these problems and entering into a transaction that might turn out to be the worst deal in history and perhaps even worse, give Express Scripts the power to keep this scheme going, which might keep drug prices high for the next few years. This will result in having Cigna and the stockholders voting for this deal blamed for a situation they could have avoided….

We believe it is also disingenuous when Cigna management says they anticipated everything that’s happened since the announcement of the deal and that the elimination of rebates would not be significant for them. If that is true, their $60 billion folly is even more egregious…. This implies that Cigna is paying an almost 100% premium for Express Scripts.

Luckily for Icahn, while he may have time to turn these open letters into completely ineffectual PowerPoints before the vote on Aug. 24, he probably doesn’t have enough time to film a completely ineffectual movie. Of course, new symptoms could still emerge—litigiousness seems a strong possibility. Unfortunately for Icahn, however, no serious observer believes he could beat up Larry Robbins on a school playground.

Glenview’s Larry Robbins takes on Carl Icahn, defends Cigna-Express Scripts deal [CNBC]
Ichan’s opposition to Express Scripts merger is ‘misguided and short-sighted,’ Cigna says [CNBC]
Cigna CEO David Cordani ‘disappointed’ Carl Icahn shared his concerns over Express Scripts deal in an open letter, says Icahn hasn’t contacted Cigna [CNBC]
ISS Backs Cigna-Express Scripts Deal [WSJ]
Open Letter to Cigna Stockholders [carlicahn .com]

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