NASHVILLE, Tenn. – Caremark Rx. Inc. (NYSE: CMX) today announced that Institutional Shareholder Services, an independent proxy voting advisory service, is now advising clients to support Caremark’s pending merger with CVS Corp. (NYSE: CVS).
ISS, whose clients include hundreds of institutional investors, mutual funds, money managers and other fiduciaries, previously had advised its clients against the deal.
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In changing its recommendation, ISS noted that “CMX shareholders are now receiving an additional $7.50 per share in cash while at the same time sharing in about half of any synergies captured by a combined CVS/CMX.”
In addition, it said, “The current CVS offer value is almost 9 percent higher than the value at the time of our original recommendation and implies a 26 percent premium over the CMX share price the day prior to the first announcement.”
“We conclude that CMX shareholders should now support the transaction.”
Tom Ryan, chairman, president and CEO of CVS, responded to the news with a statement saying: “We are delighted that ISS is recommending shareholders support the powerful combination that stands to be created through the union of these two companies.”
Caremark said, in a company statement this morning, “We are gratified that ISS has recognized the substantial enhancements to the CVS merger, which include a special cash dividend at closing of $7.50 per share, or a total of $3.2 billion, and a post-closing tender offer for 150 million shares of CVS/Caremark at $35 per share. … We urge our shareholders to vote ‘For’ the CVS/Caremark merger on March 16 and look forward to closing the transaction shortly thereafter.”
Caremark shareholders are to vote on the transaction Friday in Nashville. The CVS shareholder vote is set for Thursday in Woonsocket. Additional information is available at www.cvscaremarkmerger.com.
