“The reality is both parties probably have some risk and they’ll bargain for something between zero and $1.85 billion,” said Matt Cantor, an antitrust lawyer at Constantine Cannon.

Anthem fell 0.7 percent to $181.44 at the close in New York. Cigna lost 1.1 percent to $162.03.

‘Massive damages’

In his ruling, Delaware Chancery Judge Travis Laster said Anthem didn’t deserve a 60-day extension of an earlier order barring Cigna’s exit because it was “incredibly unlikely” that the company could close the deal. However, the judge said there was significant evidence Cigna may have violated the merger agreement by dragging its feet on antitrust concerns, which could entitle Anthem to “potentially massive damages.”

“Cigna’s repeated willful breaches of the merger agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages,” Anthem said Friday.

In its own statement a few hours later, Bloomfield, Connecticut-based Cigna used similar language, stating that “it believes that Anthem willfully breached those obligations and as a result the transaction did not receive the requisite regulatory approvals.”

The takeover had been blocked this year by a federal judge on antitrust grounds. Anthem has asked the U.S. Supreme Court to overturn a ruling finding the deal flawed, though the court is unlikely to weigh in now that Cigna has been allowed to walk.

The demise frees both Anthem and Cigna to acquire other firms, and it lets Cigna once again determine its own fate.

“That’s the next big question,” said Ana Gupte, an analyst at Leerink Partners. “I think they’ll end up being more acquisitive.”

What’s next

Cigna Chief Executive Officer David Cordani has estimated that Cigna would have $7 billion to $14 billion of deployable capital by the middle of this year. The high end of that range includes extra debt the company could take on if it decided to make acquisitions, Cordani has said. The company said on Friday it would repurchase at least $1.6 billion in stock by the end of the year.

Anthem, based in Indianapolis, has also said it would pursue deals and buybacks as its “Plan B” if the Cigna transaction didn’t go through. Anthem CEO Joseph Swedish has said he might attempt to use deals to expand in Medicare Advantage, the lucrative business of selling private health plans for the elderly.

There are a plethora of other partners for either company. A takeover of Humana Inc. by Aetna Inc. was also blocked this year on antitrust grounds. Humana, which has a market value of about $33 billion, specializes in Medicare Advantage.

Molina Healthcare Inc., which specializes in the Medicaid health program for low-income individuals, could also be in play, said Les Funtleyder, a health-care investor at E Squared Asset Management. The company’s board ousted the CEO and CFO brothers who long led the firm their father founded.

At the same time, insurers may pause as they wait and see what lawmakers in Washington do with the Affordable Care Act. Republicans are working to gut the law and rewrite insurance rules.

“Everybody will catch their breath, and maybe we’ll revisit some M&A in ’18 or ’19 as the rules of the road start to become more clear,” Funtleyder said. “I would be surprised if anybody did anything there for a while.”

The cases are Anthem Inc. v. Cigna Corp., 2017-114; and Cigna Corp. v. Anthem Inc., 2017-0109, Delaware Chancery Court (Wilmington).

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