Express Scripts Sweetener

It expects an FTC second request, though.
Publish date:

Updated from 5:47 p.m.

Express Scripts


sweetened its hostile bid for



just as it prepared to get some sour news from regulators.

St. Louis-based Express Scripts said it will add about a half-penny a share in added cash compensation to its offer for Caremark for every day between April 1 and either the deal's close or the receipt of Federal Trade Commission approval. Express Scripts said the move amounts to "additional cash consideration of approximately 6% per annum."

The news comes as Express Scripts said it expects the FTC to make a second request for information on the offer. That's notable because Caremark and its chosen partner,


(CVS) - Get Report

, have long questioned both the strategic rationale and the antitrust aspects of Express Scripts' bid for Caremark.

Drugstore chain CVS and mail-order pharmacy Caremark agreed to merge in November in an all-stock deal valued at around $21 billion. Express Scripts, a rival to Caremark in the so-called pharmacy benefit management business, stepped in the next month with a cash-and-stock deal valued at $26 billion or so. In January, the Caremark board rejected the Express Scripts deal and urged shareholders to ratify the CVS plan.

Since then, the deal has been tied up in court. CVS has twice sweetened its offer with postmerger dividend promises and claims of increasing merger-related cost savings. Express Scripts and other Caremark shareholders have sued to have the merger stopped. Courts haven't done that but they have delayed the shareholder vote on the deal. It's now scheduled for a week from Friday.

Express also raised its full-year earnings guidance by 6 cents Wednesday, to a range of $4.14 to $4.26 a share. A spokeswoman said the company sweetened its bid to get investors to focus on the value of the bid rather than worrying about when it might close.

Late Wednesday, Express Scripts rose 48 cents to $75.25 and Caremark slipped 98 cents to $60.32.