NASHVILLE, Tenn. – “A substantial majority” of shareholders of Caremark Rx Inc. (NYSE: CMX) voted to approve the company’s buyout by CVS Corp. (NYSE: CVS) at today’s special meeting in Nashville, Caremark said.
The deal was approved yesterday by CVS shareholders, 91.8 percent of whom voted in favor of the $27 billion acquisition.
“We that Caremark shareholders have recognized the compelling strategic and financial benefits of this groundbreaking merger,” said Mac Crawford, Caremark’s president, chairman, and CEO. “Caremark and CVS now have an historic opportunity to define and lead the continuing evolution of the pharmaceutical services industry and build on both companies’ records of creating value for our shareholders and customers.”
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The transaction. is expected to close by the middle of next week, CVS said, as soon as the voting results are verified by independent inspectors.
The combined company will be called CVS/Caremark Inc., and will be based in Woonsocket. Its pharmacy benefits management (PBM) functions are to be pooled under the Caremark brand.
“We have said from the beginning that this combination will transform the way pharmacy services are delivered,” said Tom Ryan, president, chairman and CEO of CVS. “… Now that we have obtained approval from both CVS and Caremark shareholders, we can begin delivering on this opportunity.”
Together, CVS and Caremark will be more competitive with Wal-Mart Stores Inc.’s 3,850 pharmacies and with PBM giant Medco Health Solutions Inc., Bloomberg News said.
“This is a transformative event to the extent it has the potential to get more patients to refill more prescriptions and bring in more revenue,” Matt Kaufler, who manages $2.6 billion including CVS shares for Clover Capital Management in Rochester, N.Y., told Bloomberg in a telephone interview this morning.
CVS shares fell 37 cents or 1.1 percent to $32.97 at 10:53 a.m. in New York Stock Exchange composite trading, while Caremark shares fell 34 cents or 0.5 percent to $62.41. Rejected rival bidder Express Scripts rose 45 cents or 0.5 percent to $82.86 in Nasdaq composite trading. The price is the highest since Sept. 20’s $83.94.
Caremark’s shareholder will get 1.67 shares in the new company plus a $7.50 one-time special dividend for each of their shares; based on yesterday’s closing price, the deal was worth $61.68 per share.
The special cash dividend of $7.50 per share will be paid “at or promptly after the closing” to Caremark shareholders of record at the close of the last business day before the closing, CVS said.
A tender offer for 150 million outstanding shares of the new CVS/Caremark will begin about five business days later.
Additional information is available at www.caremark.com and www.cvscaremarkmerger.com.
