CVS Sweetens Caremark Bid Yet Again to Top Express Scripts

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Includes: CMX, CVS, ESRX
by: Judith Levy

CVS has made its "best and final offer" for employee-benefits manager Caremark RX less than a day after Express Scripts upped its hostile bid. CVS boosted its bid by 2.5% to $26.9 billion, matching the Express offer. The Caremark board has accepted CVS's revised bid. CVS increased the dividend it is offering Caremark shareholders by $1.50, raising the total offer to $61.62 per share in cash and stock. It also plans to buy back 150 million of its own shares for $35 each after the transaction is final. Express said yesterday it would pay an extra half cent a day for each Caremark share starting April 1, which could bring its offer to as much as $62.50 a share. Express has not commented on the new CVS bid. Caremark shareholders will vote on the CVS offer on March 16 and CVS investors on March 15. A motion to delay the Caremark vote was denied yesterday by a Delaware judge. CVS shares gained $1.09 to $32.41 on the news, Caremark shares rose $0.86 to $62.16, and Express Scripts shares rose $1.23 to $76.00.

Sources: Bloomberg, MarketWatch, Reuters
Commentary: Express Scripts Ups Its Caremark BidDon't Expect Express Scripts to Bow Out of Caremark Rx BiddingIs CVS' Bid the Fix Caremark Investors Need?
Stocks/ETFs to watch: Caremark Rx, Inc. (CMX), Express Scripts, Inc. (NASDAQ:ESRX), CVS Corp. (NYSE:CVS). Competitors: Medco Health Solutions Inc. (NYSE:MHS), Wal-Mart Stores, Inc. (NYSE:WMT), Unitedhealth Group, Inc. (NYSE:UNH). ETFs: iShares Dow Jones US Healthcare Provider (NYSEARCA:IHF), Rydex S&P 500 Pure Growth (NYSE:RPG), Retail HOLDRs (NYSEARCA:RTH)

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