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$47 billion US health insurance deal stumbles over just who the new boss will be

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By Noel Young, Correspondent

June 20, 2015 | 3 min read

Two US health insurance giants - Anthem and Cigna- can't agree on a price for the Cigna business - and one big sticking point appears to be just who the new boss will be.

Cordani: He wants to be CEO

Anthem boosted its takeover offer for Cigna yesterday and is going public with the bid after the two sides failed to reach agreement.

Anthem made its offer public in an effort to put pressure on Cigna through its shareholders, said the Wall Street Journal.

Anthem said it had offered $184 a share for Cigna: about $47.5 billion for all the company’s stock that was recently outstanding.

Cigna had no comment on Saturday afternoon.

Anthem, based in Indianapolis, made a number of bids for Cigna privately in June, according to a letter Anthem Chief Executive Joseph Swedish sent to Cigna’s board on Saturday.

And here's where the who's-the-boss issue is spelled out. The letter released by Anthem, among other things, details disagreement the two sides have over the role Cigna CEO David Cordani would play in a combined company.

He wants to be CEO, if not immediately then after a period of time, which Anthem refuses to guarantee. Cordani, received compensation totalling $27.16 million last year, up 53 percent from 2013, according to a filing with the U.S. Securities and Exchange Commission, the Hartford Courant reported.

As President and Chief Executive Officer of Anthem , Swedish reportedly made $13,532,549 in total compensation in 2014.

Anthem criiticised its rival’s refusal to “reasonably negotiate.” It said the governance demands Cigna is making are excessive, given the rich premium Anthem says it is offering.

“We were stunned that the Cigna board continues to insist on a guaranteed CEO position for Mr. Cordani over choosing to allow its stockholders to realize the significant premium being offered,” the Anthem letter reads.

Anthem said it submitted four bids in June, the most recent, of $184 a share, on Thursday.

Shares of Cigna, which is based in Bloomfield, Connecticut, closed Friday at $155.30, giving the company a market value of $40 billion.

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