Express Scripts Inc. (Nasdaq: ESRX) last night boosted its hostile takeover bid for Caremark Rx Inc. (NYSE: CMX).
Express Scripts said it will raise its offer – now $26.1 billion, or $61.10 in cash and stock per share – by about half a cent per share per day, starting April 1, to compensate Caremark shareholders for any delays in the deal closing that may occur because of regulator questions.
The transaction, if approved, would be completed by the third quarter, Express Scripts said. That would bring the increase in its takeover bid to between 42 and 87 cents per share, Bloomberg News calculated.
“CVS is going to have to do something to finally wrestle this thing to the ground,” Matt Kaufler, who helps manage $2.6 billion, including CVS shares, at Clover Capital Management in Rochester, N.Y., told Bloomberg.
The revised offer came shortly after a Delaware Chancery Court rejected an Express Scripts-led bid to block Caremark Rx’s shareholder vote on the $25.7 billion rival offer from CVS Corp. (NYSE: CVS). The CVS offer goes before Caremark shareholders March 16; the company’s board has urged them to approve the merger.
The court said in its ruling that further delay would be disruptive to Caremark’s business.
Also yesterday, Express Scripts had said it expects to receive a second request for information on its Caremark bid from the Federal Trade Commission. The company previously had refiled the bid, hoping to avoid such a second request.
“The differences between the proposed CVS/Caremark merger and the Express Scripts attempted takeover could not be more clear than they are today,” Thomas M. Ryan, CVS chairman, president and CEO, said in a statement last night, adding “Express Scripts has done its best to distract shareholders from the shortcomings of its highly conditional offer.”
Additional information is available at www.cvscaremarkmerger.com.
