Express Scripts Says Current Caremark Bid is 'Best and Only Offer'

Express Scripts released a press release yesterday saying its current bid for Caremark is its "best and only offer" and that "without confirmatory due diligence," it can not possibly offer more for Caremark. The CVS offer of $24.9 billion, an all-equity bid that includes 1.67 of its own shares as well as a special $7.50 a share cash dividend, is for less than Express's $26.1 billion cash and stock offer, but it has several advantages for Caremark shareholders. The CVS deal already has antitrust clearance and it will close sooner. Express CEO George Paz said in yesterday's press release: "If we were able to identify additional value during confirmatory due diligence... it could result in an increase to our offer price." The Wall Street Journal writes that the likelihood of Express Getting greater cooperation from Caremark is "seen as unlikely." The bidding war for Caremark has been heated due to the fact that the company that wins will gain a stronger position in negotiating discounts from the pharma industry. Yesterday's news sent Express shares higher by $3.52, or 4.57%, to $80.59 as shareholders were relieved the company wouldn't likely be increasing its Caremark bid. Caremark and CVS shares both fell on the news, by 1.94% and 1.9% respectively.

Sources: Press Release, Wall Street Journal, Bloomberg, MarketWatch, Forbes
Commentary: CVS Sweetens Caremark Bid Yet Again to Top Express Scripts • Don't Expect Express Scripts to Bow Out of Caremark Rx Bidding • Desperate Moves in the CVS, Express Scripts, Caremark Tug o' War
Stocks/ETFs to watch: Caremark Rx, Inc. (CMX), Express Scripts, Inc. (ESRX), CVS Corp. (CVS). Competitors: Medco Health Solutions Inc. (MHS), UnitedHealth Group Inc. (UNH), Wal-Mart Stores, Inc. (WMT). ETFs: iShares Dow Jones US Healthcare Provider (IHF), Retail HOLDRs (RTH)

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