Unassociated Document
Filed
by CVS Corporation pursuant to Rule 425 under the
Securities Act of 1933
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Subject
Company: Caremark Rx, Inc. Commission File No.:
001-14200
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CVS
COMMENTS ON ISS RECOMMENDATION IN SUPPORT OF CVS/CAREMARK
MERGER AND EXPRESS
SCRIPTS’ ANNOUNCEMENT
WOONSOCKET,
RI, March 13, 2007 - CVS
Corporation (NYSE: CVS) said it is pleased Institutional Shareholders Services
Inc. (ISS) has recommended that Caremark Rx, Inc. (NYSE: CMX) shareholders
support the proposed merger with CVS.
In
addition, in response to Express Scripts’ (NASDAQ: ESRX) announcement that its
current offer to acquire Caremark is its “best and only” offer, CVS urged
Caremark shareholders to consider that the highly conditional nature of Express
Scripts’ “smoke and mirrors” offer may well leave them with a transaction on
reduced terms or no deal at all should they vote down the merger with CVS.
Consider
just some of the many risks inherent in Express Scripts’ hostile offer:
Regulatory
Risk
· |
The
FTC and the 22 State Attorneys General investigating the anti-competitive
implications of Express Scripts’ hostile bid may never approve such a
transaction.
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Shareholder
Approval Risk
· |
Express
Scripts shareholders may well vote down this ill-conceived
transaction.
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Financing
Condition Risk
· |
In
light of the highly leveraged nature of its bid and the significant
business risk associated with several months of regulatory delay,
Express
Scripts may never obtain the necessary financing to acquire Caremark.
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In
addition, Express Scripts has left itself the ability to walk away in the event
of any adverse developments in Caremark’s business (such as material client
defections), an adverse change in general market conditions or even an act
of
war or terrorist attack. All of this calls into question whether or not Express
Scripts even seeks to pursue a transaction or is merely attempting to disrupt
the CVS/Caremark transaction.
Shareholders
should also note that in the unlikely event that the Express Scripts/Caremark
deal were to be completed, Caremark shareholders would own a 57% interest of
an
overleveraged company with a junk credit rating unable to make the necessary
investment in its own business.
In
contrast, CVS’ best and final offer provides Caremark shareholders with real and
immediate value, including:
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A
special cash dividend of $7.50 per share payable at or promptly after
closing of the merger to Caremark shareholders of record as of the
close
of business on the day immediately preceding the closing date of
the
merger.
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· |
A
cash
tender offer promptly following the closing of the CVS/Caremark merger
for
150 million (or about 10%) of its outstanding shares at a fixed price
of
$35 per share, reflecting our confidence in the value proposition
of this
strategic combination.
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· |
A
merger that
is solidly accretive to earnings and cash flow in 2008 and growing
thereafter.
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A
combined
company that is expected to retain a solid investment grade
rating.
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“We
are
delighted that ISS is recommending shareholders support the powerful combination
that stands to be created through the union of these two companies,” said Tom
Ryan, Chairman, President and CEO of CVS. “Our offer not only provides Caremark
shareholders with immediate financial benefits, but it will also give
shareholders of both companies the opportunity to begin realizing the long-term
value only our transaction can provide. In stark contrast, Express Scripts’
highly conditional offer cannot mask its inability to provide Caremark with
any
real assurance that it is serious about pursuing its bid, threatening to leave
Caremark shareholders alone at the altar should they decide to vote down our
transaction. We look forward to gaining shareholder approval for our deal at
CVS’ and Caremark’s respective shareholder votes later this week.”
The
special meeting of CVS shareholders to approve the transaction will be held
on
March 15, 2007 and the special meeting of Caremark shareholders for the same
purpose will be held on March 16, 2007. CVS urges Caremark shareholders to
vote
FOR
the
CVS/Caremark merger today. CVS shareholders who have questions about the
proposed merger, or need assistance in voting your shares, please call the
firm
assisting CVS in the solicitation of proxies:
MORROW
& CO., INC.
Toll-Free
at 800-245-1502
(Banks
and Brokers may call collect at 203-658-9400)
Caremark
shareholders who have questions about the proposed merger, or need assistance
in
voting your shares, please call the firm assisting Caremark in the solicitation
of proxies:
INNISFREE
M&A INCORPORATED
Toll-Free
at 877-750-9498
(Banks
and Brokers may call collect at 212-750-5833)
About
CVS
CVS
is America's largest retail pharmacy, operating approximately 6,200 retail
and
specialty pharmacy stores in 43 states and the District of Columbia. With more
than 40 years of dynamic growth in the retail pharmacy industry, CVS is
committed to being the easiest pharmacy retailer for customers to use. CVS
innovatively serves the healthcare needs of all customers through its
CVS/pharmacy stores; its online pharmacy, CVS.com; its retail-based health
clinic subsidiary, MinuteClinic; and its pharmacy benefit management, mail
order
and specialty pharmacy subsidiary, PharmaCare. General information about CVS
is
available through the Investor Relations portion of the Company's website,
at
http://investor.cvs.com,
as well as through the pressroom portion of the Company's website, at
www.cvs.com/pressroom.
Certain
Information Regarding the Tender Offer After Closing of the
Merger
The
information in this press release describing CVS’ planned tender offer following
closing of the CVS/Caremark merger is for informational purposes only and does
not constitute an offer to buy or the solicitation of an offer to sell shares
of
CVS/Caremark’s common stock in the tender offer. The tender offer will be made
only pursuant to the Offer to Purchase and the related materials that
CVS/Caremark will distribute to its shareholders and only if the CVS/Caremark
merger is consummated. Shareholders should read the Offer to Purchase and the
related materials carefully because they contain important information,
including the various terms and conditions of the tender offer. Subsequent
to
the closing of the CVS/Caremark merger, shareholders of CVS/Caremark will be
able to obtain a free copy of the Tender Offer Statement on Schedule TO, the
Offer to Purchase and other documents that CVS/Caremark will be filing with
the
Securities and Exchange Commission from the Commission’s website at www.sec.gov.
Shareholders may also obtain a copy of these documents, without charge, from
Morrow & Co., Inc., the information agent for the tender offer, toll free at
1 (800) 245-1502 when these documents become available. Shareholders are urged
to carefully read these materials prior to making any decision with respect
to
the tender offer. Shareholders and investors who have questions or need
assistance may call Morrow & Co., Inc., the information agent for the tender
offer, toll free at 1 (800) 245-1502.
Cautionary
Statement Regarding Forward-Looking Statements
This
document contains certain forward-looking statements about CVS and Caremark.
When used in this document, the words "anticipates", "may", "can", "believes",
"expects", "projects", "intends", "likely", "will", "to be" and any similar
expressions and any other statements that are not historical facts, in each
case
as they relate to CVS or Caremark or to the combined company, the management
of
either such company or the combined company or the transaction are intended
to
identify those assertions as forward-looking statements. In making any of those
statements, the person making them believes that its expectations are based
on
reasonable assumptions. However, any such statement may be influenced by factors
that could cause actual outcomes and results to be materially different from
those projected or anticipated. These forward-looking statements, including,
without limitation, statements relating to anticipated accretion, return on
equity, cost synergies, incremental revenues and new products and offerings,
are
subject to numerous risks and uncertainties. There are various important factors
that could cause actual results to differ materially from those in any such
forward-looking statements, many of which are beyond the control of CVS and
Caremark, including macroeconomic condition and general industry conditions
such
as the competitive environment for retail pharmacy and pharmacy benefit
management companies, regulatory and litigation matters and risks, legislative
developments, changes in tax and other laws and the effect of changes in general
economic conditions, the risk that a condition to closing of the transaction
may
not be satisfied, the risk that a regulatory approval that may be required
for
the transaction is not obtained or is obtained subject to conditions that are
not anticipated and other risks to consummation of the transaction. The actual
results or performance by CVS or Caremark or the combined company, and issues
relating to the transaction, could differ materially from those expressed in,
or
implied by, any forward-looking statements relating to those matters.
Accordingly, no assurances can be given that any of the events anticipated
by
the forward-looking statements will transpire or occur, or if
any
of them do so, what impact they will have on the results of operations or
financial condition of CVS or Caremark, the combined company or the
transaction.
Important
Information for Investors and Stockholders
A
Registration Statement on Form S-4, containing a joint proxy statement and
prospectus relating to the proposed merger of Caremark and CVS, was declared
effective by the Securities and Exchange Commission on January 19, 2007. CVS
and
Caremark urge investors and shareholders to read the joint proxy
statement/prospectus and any other relevant documents filed by either party
with
the SEC because they will contain important information.
Investors
and shareholders may obtain the joint proxy statement / prospectus and other
documents filed with the SEC free of charge at the website maintained by the
SEC
at www.sec.gov. In addition, documents filed with the SEC by CVS will be
available free of charge on the investor relations portion of the CVS website
at
http://investor.cvs.com. Documents filed with the SEC by Caremark will be
available free of charge on the investor relations portion of the Caremark
website at www.caremark.com.
CVS
and
certain of its directors and executive officers are participants in the
solicitation of proxies from the shareholders of CVS in connection with the
merger. A description of the interests of CVS’s directors and executive officers
in CVS is set forth in the proxy statement for CVS’s 2006 annual meeting of
shareholders, which was filed with the SEC on March 24, 2006 and in the joint
proxy statement/prospectus referred to above. Caremark, and certain of its
directors and executive officers may be deemed to be participants in the
solicitation of proxies from its shareholders in connection with the merger.
A
description of the interests of Caremark’s directors and executive officers in
Caremark is set forth in the proxy statement for Caremark’s 2006 annual meeting
of shareholders, which was filed with the SEC on April 7, 2006 and in the
joint proxy statement/prospectus referred to above.
Contact: |
CVS Corporation |
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Investor Inquiries: |
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Nancy Christal, 914 722-4704 |
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or |
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Media
Inquiries:
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Eileen
Howard Dunn, 401
770-4631
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