Unassociated Document
Filed
by
CVS Corporation
pursuant
to Rule 425 under the Securities Act of 1933
Subject
Company: Caremark Rx, Inc.
Commission
File No.: 001-14200
CVS
Urges Caremark Shareholders to Vote for Immediate Value and Long-Term Growth
and
against Uncertainty and Risk
Pleased
With ISS Recommendation; Comments on Express Scripts' Proxy
Statement
WOONSOCKET,
RI, March 14, 2007 - In advance of the CVS Corporation (NYSE: CVS) and Caremark
Rx, Inc. (NYSE: CMX) shareholder meetings scheduled for tomorrow and Friday,
respectively, CVS today reiterated the benefits of its merger with Caremark.
CVS
urged Caremark shareholders to vote for the certainty, value and long-term
opportunities presented by the CVS/Caremark merger. CVS also commented on
today’s filing by Express Scripts of its preliminary proxy statement and pointed
out that voting against the transaction would leave Caremark shareholders with
substantial uncertainty and risk.
The
substantial benefits of CVS/Caremark offered to shareholders were further
underscored on March 12th
when
Institutional Shareholder Services recommended that Caremark shareholders vote
to approve the proposed merger with CVS. Benefits of the CVS/Caremark
merger include:
Certainty
| |
·
|
A
transaction that has cleared all necessary regulatory hurdles and
is
poised to close immediately following CVS and Caremark shareholder
approvals.
|
Immediate
Value
| |
·
|
A
best and final offer that includes 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.
|
| |
·
|
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.
|
| |
·
|
A
merger that
is solidly accretive to earnings and cash flow in 2008 and growing
thereafter.
|
Long-Term
Opportunity
| |
·
|
Conservatively
estimated annual cost synergies in excess of $500
million.
|
| |
·
|
Between
$800 million and $1 billion in incremental revenues in 2008 and
significantly more thereafter.
|
| |
·
|
Combined
company to maintain a solid investment grade
rating.
|
EXPRESS
SCRIPTS’ PRELIMINARY PROXY STATEMENT REINFORCES CONDITIONALITY AND RISK INHERENT
IN ITS HOSTILE OFFER
CVS
asked
Caremark shareholders to consider the remarkable number of conditions set forth
in the preliminary proxy statement filed by Express Scripts with the SEC earlier
today. In that regard, Caremark shareholders should review the section entitled
“Conditions to the Exchange Offer” on page 16 of the Express Scripts filing. The
conditions range from needing FTC approval, which in light of the FTC’s recently
issued second request is several months away if it occurs at all; to approval
of
Express Scripts’ shareholders; to its lenders having the unilateral right to
cancel funding for the transaction if they find anything in due diligence not
to
their liking. CVS believes that these conditions will give Express Scripts
the
chance to walk away from Caremark shareholders at Express Scripts’ discretion,
leaving them with a damaged company and potentially no deal at
all.
“We
want
to thank shareholders of both CVS and Caremark for the support they have shown
us throughout this whole process,” said Tom Ryan, Chairman, President and CEO of
CVS. “The CVS/Caremark merger is by far the best option available for Caremark
shareholders, and Institutional Shareholder Services’ support only serves to
underscore the benefits of our transaction. We look forward to closing our
merger with Caremark immediately following approval by the CVS and Caremark
shareholders.”
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 Investors: Nancy Christal, 914-722-4704 or Media: Eileen Howard Dunn,
401-770-4631