CVS Sweetens Caremark Bid

Drug store chain CVS (CVS Quote) sweetened its bid for Caremark (CMX Quote), promising holders of the mail-order pharmacy a $2-a-share dividend after the deal closes.

The companies, which agreed in November to a merger valued at some $22 billion, also said they had gotten commitments to borrow $5 billion to retire 150 million shares after the merger's expected first-quarter closing. CVS and Caremark said the buyback will "optimize" their capital structure and boost return on equity.

The companies made the announcement late Tuesday, at the end of a day that started with Caremark's hostile suitor Express Scripts (ESRX Quote) opening a tender offer for Caremark shares.

Last week, Nashville, Tenn.-based Caremark rejected a $26 billion cash-and-stock proposal from Express Scripts in favor of its already announced CVS merger. Caremark said the Express Scripts bid lacked strategic rationale and could raise antitrust concerns. ...