Caremark Shareholder Vote on CVS Bid Postponed
The Wall Street Journal reported today that the Delaware Chancery Court has postponed the shareholder vote on CVS Corp.'s ("CVS") takeover bid of Caremark Rx Inc. ("Caremark"). According to the article, the Chancery Court also suggested that Caremark should enter into negotiations with Express Scripts Inc. ("Express Scripts"), whose $27.3 billion dollar bid has been rejected. At the earliest, the shareholder vote on the CVS deal will take place on March 9.
Caremark has long rejected the competing proposal of Express Scripts on the grounds that the deal would violate antitrust laws. Indeed, the merger of these two companies would unite two of the largest pharmacy benefit managers in the country. Nevertheless, the judge questioned this rationale, stating that such concerns did not prevent Caremark from entering into negotiations with Express Scripts in the past.
Responding to the move by the Chancery Court, Caremark stated in a press release,
Caremark will inform shareholders as promptly as possible regarding the new date of the special meeting to approve the CVS merger. With the tripling of the special cash dividend to $6.00 per Caremark share announced earlier today, the CVS merger now offers Caremark shareholders even greater near-term value than it did before, in addition to longer-term strategic benefits and growth opportunities. The Company looks forward to obtaining shareholder approval as soon as possible and promptly closing this merger, which has already received regulatory clearance.
