Caremark Holders Back CVS Deal

Express Scripts' bid to break up the merger falls short.
Author:
Publish date:

Updated from 9:55 a.m.

NASHVILLE, Tenn. --

Caremark

(CMX)

shareholders voted Friday to approve the mail-order pharmacy's $26 billion merger with retail drugstore chain

CVS

(CVS) - Get Report

.

The decision ends a three-month-long drama in which

Express Scripts

(ESRX)

had sought to prevent Caremark and CVS from merging by making its own cash-and-stock offer.

CVS said it expects the transaction to close early to mid next week, promptly after the vote is certified by the independent inspector of election.

Wall Street sent Express Scripts shares up in heavy trading Friday morning, as investors embraced the company's future as an independent entity. Caremark and CVS traded modestly lower.

Around midday, Express Scripts was up 34 cents to $82.75. CVS was down 66 cents to $32.68, and Caremark was off 79 cents to $61.96. At recent prices, the CVS deal is worth $62.20 a Caremark share.

Shares in Caremark and Express Scripts have both soared since Express Scripts announced Dec. 18 it would seek to buy Caremark, its rival in the pharmacy benefit management business.

Caremark's board rejected the Express Scripts bid in January, questioning its strategic rationale and antitrust prospects, but the presence of a rival bidder eventually caused CVS to raise its offer three times through postmerger dividends.

Wall Street seemed split on which deal might succeed until Express Scripts announced last week that it wouldn't further sweeten its offer and that it faced a second request for information from regulators. Those comments swung investor sentiment firmly behind the CVS deal, which has already gotten regulatory approval.