Egg on Caremark's Face

Caremark has so far responded with some quick disclosures and a new meeting date less than three weeks down the road. The meeting will be held on March 16 -- the earliest date possible -- and has been moved from the downtown Nashville Hilton to a legal suite inside the Nashville City Center.

CtW Investment Group, a proxy advisory firm, has urged Caremark shareholders to reject the proposed merger in the meantime.

"Rather than take the court's censure as a cue to go back to the drawing board and run a process that truly maximizes shareholder value, the board chose to respond with the minimum disclosure required ... in order to rush into a special shareholder meeting," CtW complained. "A 'no' vote will hold the Caremark board accountable for its half-hearted negotiations. Following such a vote, the Caremark board should finally obtain full value for the company by initiating a fair and thorough auction process."

Chandler is clearly troubled by the negotiating process so far. He seems to see a board facing possible punishment over questionable stock option grants -- his new area of expertise -- that could be trying to protect itself.

CtW sees the same. The firm noted on Monday that Caremark directors could enjoy much greater legal protection if the merger with CVS goes through.