- CVS and Caremark have agreed to increase the special cash dividend payable to Caremark shareholders promptly following closing of the merger to $7.50 per share [from $6 per share].
- Consistent with (and in lieu of) the previously announced accelerated share repurchase program, promptly following closing of the merger CVS/Caremark will commence a cash tender offer for 150 million (or about 10%) of its outstanding shares at a fixed price of $35 per share.
Express Scripts expects to receive today a second information request from the Federal Trade Commission about the anti-trust implications of its merger. CVS claims that this uncertainty calls Express Scripts' bid into question. Express Scripts attempted to defuse this uncertainty by sweetening its offer yesterday.
It is possible that Caremark shareholders may turn down the CVS proposal, notwithstanding the FTC uncertainty, because the Caremark Board refused to negotiate with Express Scripts. On the other hand, the CVS merger would close almost immediately and produce the now $7.50 dividend, and a bird in the hand ...