In a fiery response, Cigna Corp. rejected a $54-billion takeover bid from Anthem Inc. and unleashed several criticisms of the health insurance giant.
Cigna said Sunday that the $184-a-share offer was inadequate and not in the best interests of its shareholders.
The nation's fifth-largest health insurer expressed frustration with Anthem taking its private negotiations public a day earlier and for failing to address key issues such as the fallout from a massive data breach at Anthem this year.
Cigna also questioned Anthem's ability to overcome antitrust concerns raised by the deal and whether its chief executive was up to the task of leading the combined company.
All this comes amid an industrywide scramble for merger partners that could dramatically reshape the market for employers, consumers and government programs.
Health insurers are looking to grow in size to win better terms from medical providers and to maximize profits as business changes under the Affordable Care Act.
In its letter Sunday to Anthem's board, Cigna executives said that "we are deeply disappointed with your recent actions."
It then listed several concerns, such as "Anthem’s lack of a growth strategy, complications relating to your membership in the Blue Cross Blue Shield Assn. and the related antitrust actions, and other significant challenges, such as the massive data breach you experienced in February."
A spokeswoman for Anthem declined to comment Sunday on Cigna's response.
Saturday, Anthem said talks had broken down over Cigna's insistence on its chief executive, David Cordani, getting the top job at the combined company either immediately or in the near future.
Anthem insisted that its CEO, Joseph Swedish, would lead the merged company for two years and then Cordani would get his opportunity.
Cigna fired back Sunday at Swedish and pointed out that its management team had outperformed Anthem's in terms of revenue and profit growth in recent years.
"Your insistence that one person, Joseph Swedish, assume four roles, including chairman of the board, CEO, president, as well as head of integration, is disconcerting and risky," Cigna said in its letter.
Anthem's data breach affecting nearly 80 million Americans was another sticking point.
Cigna expressed worry about the "system failure" that led to the breach of sensitive customer information and whether Anthem could win back the public's confidence.
"Data protection has become both a high-profile issue and a focus of the public and governmental agencies," Cigna said. "Trust with customers and providers is critical in our industry, and Anthem has yet to demonstrate a path toward restoring this trust."
Other big health insurers are also eyeing deals.
Aetna Inc., the nation's third-largest health insurer, has made an offer for Humana Inc., a big player in privately run Medicare Advantage plans.
Ana Gupte, a healthcare analyst at Leerink Partners, said she thinks Anthem will be successful at buying Cigna and Aetna will lock up Humana.
That would further consolidate market power among the three largest U.S. health insurers: UnitedHealth Group Inc., Anthem and Aetna.
Anthem is California's biggest for-profit health insurer and leads enrollment in the Covered California exchange for individuals.