Caremark Merger Updates

  • The Caremark shareholder meeting to consider the CVS merger deal will be held on February 20. (The CVS shareholder meeting is three days later.) As previously blogged, Caremark, in advance of the meeting, has sent shareholders proxy statements supporting the deal (and offering a special $2 dividend), and Express Scripts has sent them an exchange offer to those shareholders offering a different deal. This week, Caremark sent shareholders a letter commending the value of the CVS deal. Express Scripts issued a retort according to the Boston Globe.
  • The Pirelli Armstrong Retiree Medical Benefits Trust brought a shareholder derivative action in federal court in Nashville, where Caremark is headquartered, challenging the CVS merger. This is the latest of several lawsuits pending over the merger. Express Scripts has filed a suit in Delaware where Caremark in incorporated challenging the breakup fee in the CVS merger deal.
  • Reuters is reporting today that sixteen state legislators have written to the Federal Trade Commission warning about the anti-competitive aspects of the Express Scripts deal, which would combine the 2nd and 3rd largest prescription benefit managers. The FTC, which already has approved the CVS deal, must complete its review of the Express Scripts deal by February 2. In a related article, the Wall Street Journal reported yesterday about how shareholder votes can be swung by institutional investors borrowing shares. Much worse than hanging chads.