Pharmacy chain CVS offered Caremark Rx shareholders a special $2 a share cash dividend as it fought to defend the pair’s $23.3bn merger from a $24.8bn hostile bid by Express Scripts. CVS and Caremark also said they would retire 150m shares, or about 10 per cent of the combined company’s shares, after the deal’s close. Express Scripts earlier on Tuesday launched a formal hostile bid for Caremark, its larger rival in the US drug benefits management sector aiming to break up the Caremark-CVS deal. Caremark has refused to entertain Express Scripts’ proposal, prompting the company to address Caremark shareholders directly with a formal exchange offer. Caremark has continued to support the CVS deal, despite its lower valuation, citing the absence of anti-trust concerns and the potential to change the industry landscape by uniting drug distribution channels and consolidating purchasing power.

This entry was posted by Helen Thomas on Wednesday, January 17th, 2007 at 5:21 and is filed under M&A. Tagged with caremark, cvs, express scripts. Edit this entry.