CVS, Caremark Rx try to sweeten merger deal


dpa German Press Agency
Published: Wednesday January 17, 2007

New York- Caremark Rx Inc and US pharmacy chain CVS
Corporation have countered a deal meant to derail their merger
agreement by pharmaceutical benefits manager Express Scripts Inc.
CVS and Caremark offered shareholders a one-time, 2-dollar-per-
share dividend beyond their earlier merger agreement, and said they
would retire 150 million shares of stock once the companies merge.

The CVS-Caremark agreement, which was first announced in November,
was designed to create a firm better able to compete with retail
giant Wal-Mart's 3,850 retail pharmacies and with Medco Health
Solutions Inc, the country's largest manager of employee drug plans.

In November, CVS, the second-largest US pharmacy chain, announced
a 21-billion dollar takeover deal with Caremark, a pharmaceutical
services firm.

Caremark shareholders are to receive 48.53 dollars and 1.67 CVS
shares for every Caremark share under that deal.

Pharmaceutical benefits manager Express Scripts said Tuesday it
was offering 29.25 dollars in cash and 0.43 shares of its stock to
Caremark shareholders in return for their shares in a bid to compete
with CVS as a potential merger partner.

A Express Scripts' merger offer was rejected by Caremark's board
last week, Bloomberg financial news service reported.

"While we would prefer to meet with the Caremark Board and
management to negotiate a transaction between Express Scripts and
Caremark, we are taking this action in light of the Caremark Board's
rejection of and refusal to even discuss our superior proposal," the
company said in a statement.

Express Scripts believes it has the stronger offer, but Caremark
intends to continue with its current deal with CVS.

© 2006 - dpa German Press Agency