Managed-care provider Cigna Group on Sunday announced a massive stock buyback, amid a report that it has abandoned its bid to buy rival Humana Inc.

Citing sources familiar with the matter, the Wall Street Journal reported Sunday that Cigna

and Humana

could not agree to financial terms of an deal, and that Cigna is shifting its efforts toward a smaller acquisition.

The potential Humana acquisition, first reported in late November, had sent Cigna shares about 10% lower, as investors were skeptical it could be successfully pulled off.

Cigna did not immediately reply to an email seeking confirmation about the Journal report. But the company did announce Sunday an additional $10 billion stock buyback, bringing its total share repurchase authority to $11.3 billion.

In a statement, Cigna said it intends to use the majority of its discretionary cash flow for share repurchases next year, buying back at least $5 billion of its stock by the end of the first half of 2024.

“We believe Cigna’s shares are significantly undervalued and repurchases represent a value-enhancing deployment of capital as we work to uphold high-quality care, improved affordability and better health outcomes,” Cigna Chief Executive David M. Cordani said in a statement.

Cigna also reaffirmed its full-year 2023 outlook of at least $24.75 a share, with a target of at least $28 a share for full-year 2024.

Cigna shares are down about 22% year to date, while Humana stock is down about 6%. The S&P 500
by comparison, is up about 20% in 2023.

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