CVS Caremark Corp.

Wilmington, DE: (Jun-10-07) A shareholders lawsuit was filed against CVS Caremark Corp., the second largest US drugstore chain, which challenged the buyout that formed the company. Combining the two companies created one of the biggest US mail order and retail pharmacy chains and made the business more competitive with Walgreen's, which has 5,700 stores, and Wal-Mart Stores Inc., which has more than 3,800 pharmacies offering discount prices on generic drugs. CVS beat out a $27.5 billion bid for Caremark by St. Louis- based Express Scripts Inc., the third largest US manager of drug benefits for employer health plans. After CVS officials agreed to pay an additional $7.50 per share for Caremark stock, shareholders voted to back CVS's bid over Express Script's offer. CVS wound up paying a total of $65.40 a share in cash and stock, or $27.2 billion, for Caremark. That's at least $6 billion more than CVS originally offered when it launched its all-stock takeover bid in November 2006.

In a settlement reached, Delaware Chancery Court Judge William B. Chandler III ruled that a Louisiana pension fund's decision to accept the $7.50-per-share increase CVS Corp. made to its bid for Caremark Rx Inc. To settle its suit was a reasonable resolution of the dispute and that the settlement was reached in the best interest of all shareholders. He also approved $20 million in stockholders' legal fees and expenses. [DELAWARE ONLINE: CVS CAREMARK MERGER]

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Published on Jun-11-07