Cigna Sells More Stock to Pay for HealthSpring Deal – Deal Journal – WSJ

Despite historically low interest rates, Cigna is opting to sell about 15 million shares of fresh stock to raise money for its $3.8 billion acquisition of HealthSpring.

Cigna earlier this month sold $2.1 billion of debt, and the equity issuance at Tuesday’s closing price would bring in some $750 million. (Cigna also said in a news release that its bankers have the option to buy 2.25 million additional Cigna shares.)

Cigna’s planned stock sale would boost the amount outstanding about 6%. The stock price is slumping about 2.2% in pre-market trading on Wednesday.

When Cigna announced last month its deal for HealthSpring, the company said it planned to finance about 20% of the acquisition price from sales of new Cigna stock. The rest of the money will come from issuing new debt and from Cigna’s existing cash stockpile.

via Cigna Sells More Stock to Pay for HealthSpring Deal – Deal Journal – WSJ.