Express Scripts Inc. (ESRX) Stock Up on Flawed Merger
Pharmacy benefit manager Express Scripts Inc. (ESRX 80.80, +3.73) Monday seemed to put the kibosh on a long-running, heated competition to acquire competitor Caremark Rx Inc. (CMX 60.59, -1.31) when it said its bid for the company represented its "best and only" offer since it isn't being given a chance to conduct confirmatory due diligence.
Express Scripts said a flawed merger process, which involved board refusal to permit confirmatory due diligence by Express Scripts, prevented Caremark stockholders from receiving Express Scripts' best and final offer.
Express Scripts' bid was made after Caremark agreed to be acquired by drug-store chain CVS Corp. (CVS 32.04, -0.56).
Express Scripts recently increased its 2007 diluted earnings per share guidance of $4.14 to $4.26, reflecting expectations for growth of 26% to 29% over 2006. The company said it believes there's significant upside to its stock price in the short term as well as in the long term.
Express Scripts officials said in a press release that the company believes Caremark stockholders "should have the opportunity to own a high-growth Express Scripts stock, and in the CVS proposal, Caremark's stockholders are being offered currency in a lower growth stock."
The acknowledgment from Express Scripts that it won't raise its offer without added due diligence, however, seemingly clears the way for CVS to win the battle for Caremark, as its bid has already won antitrust approval. Caremark shareholders are scheduled to vote on the CVS bid March 16.
--Christine Marie Nielsen, Briefing.com
Express Scripts said a flawed merger process, which involved board refusal to permit confirmatory due diligence by Express Scripts, prevented Caremark stockholders from receiving Express Scripts' best and final offer.
Express Scripts' bid was made after Caremark agreed to be acquired by drug-store chain CVS Corp. (CVS 32.04, -0.56).
Express Scripts recently increased its 2007 diluted earnings per share guidance of $4.14 to $4.26, reflecting expectations for growth of 26% to 29% over 2006. The company said it believes there's significant upside to its stock price in the short term as well as in the long term.
Express Scripts officials said in a press release that the company believes Caremark stockholders "should have the opportunity to own a high-growth Express Scripts stock, and in the CVS proposal, Caremark's stockholders are being offered currency in a lower growth stock."
The acknowledgment from Express Scripts that it won't raise its offer without added due diligence, however, seemingly clears the way for CVS to win the battle for Caremark, as its bid has already won antitrust approval. Caremark shareholders are scheduled to vote on the CVS bid March 16.
--Christine Marie Nielsen, Briefing.com
Labels: ESRX, Express Scripts Inc.
posted by Stock Administrator @ 7:29 AM
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