By Tom Weber, KWMU / AP
St. Louis, MO – Top management at St. Louis-based Express Scripts will be watching two key votes over the next two days.
Shareholders of the CVS drug store chain are deciding today (Thursday) whether they support CVS's plan to merge with Caremark. Express Scripts has also made a hostile bid for Caremark, its rival in the prescription drug insurance business.
Caremark's shareholders will vote Friday on whether they support the CVS deal; Express has repeatedly appealed to those shareholders to vote no.
Express argues Caremark's board "continues to waste opportunities to obtain the highest value for Caremark stockholders" by shutting the company out of the due diligence process and repeatedly rejecting its bid.
On Wednesday, CVS reminded investors that its latest bid which tacks on a $7.50 special dividend at the deal's close won over longstanding critic, the proxy advisory firm Institutional Shareholders Services Inc., which earlier advised Caremark shareholders to reject the CVS offer.
CVS originally proposed in November to buy Caremark for about $21.2 billion in stock. Express Scripts then made a $26 billion stock-and-cash counter-bid in December. The final offers, made last week, each valued Caremark at around $26.5 billion.
However, a 5% rise in Express Scripts' share this week and a 1% drop in CVS shares have shifted the respective transaction values accordingly.
One advantage CVS has over Express Scripts is regulatory approval for the transaction. Regulators continue to ask questions about Express Scripts' offer given antitrust concerns. Express Scripts is the third-largest pharmacy benefits manager, with Caremark the second-largest behind market leader Medco Health Solutions Inc.