CVS Says Express Scripts Offer for Caremark is a Losing Proposition for Shareholders, Consumers and Employers.WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I. -- CVS (1) (Concurrent Versions System) A version control system for Unix that was initially developed as a series of shell scripts in the mid-1980s. CVS maintains the changes between one source code version and another and stores all the changes in one file. Corporation (NYSE NYSESee: New York Stock Exchange : CVS) ran an advertisement in the Wall Street Journal today citing the substantial negative consequences to shareholders, consumers and employers that would stem from Express Scripts (Nasdaq: ESRX) acquiring Caremark (NYSE: CMX CMX Corel Presentation Exchange (file extension) CMX Cisco Mobile Exchange CMX Cloaca Maxima (sewage system of ancient Rome; Finnish rock band) CMX Crisis Management Exercise ). The text of the advertisement follows: Express Scripts Offer for Caremark: Everyone Loses! The CVS/Caremark merger is in the best interests of shareholders, consumers and employers. It will create the nation's premier pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. services company and deliver concrete and superior value to all concerned. In contrast, CVS believes an Express Scripts/Caremark combination would be a Losing Proposition for shareholders of both Caremark and Express Scripts as well as for consumers and employers. Below are just a few of the likely negative consequences that would result from this ill-conceived ill-con·ceived adj. Poorly conceived or planned: an ill-conceived scheme to take over the company. Adj. 1. combination: * Caremark Shareholders wouldO
-- Own 57 percent of a company that would be very highly leveraged
and likely have a "junk" credit rating.
-- Risk losing substantial business, including three clients alone
that account for $8 billion in revenues annually. Caremark has
won approximately $1 billion in net revenues from Express
Scripts since 2004 and many of these clients left Express
Scripts over dissatisfaction with service and performance. They
would almost certainly leave again if Express Scripts were to
acquire Caremark.
-- Suffer from missing the entire 2007 selling season, reducing
profits and damaging the business.
-- Miss out on substantial financial benefits stemming from a
CVS/Caremark combination, including:
-- 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;
-- a share repurchase program that will retire
approximately 10 percent of the combined company's
outstanding shares promptly following closing;
-- a $2-per share dividend payable to Caremark
shareholders upon closing; and
-- double digit cents per share accretion in 2008.
* Express Scripts Shareholders wouldO
-- Swap their ownership and control of Express Scripts for a 43
percent minority position in a horizontal combination that
offers no strategic benefits.
-- See their management distracted as it attempts to manage a
transaction 20 times larger than it has ever undertaken and
integrate a company three times its size while carrying a heavy
debt burden.
-- Risk seeing the value of their investment, which has already
fallen by approximately 21 percent in the last year, decrease
even further under the weight of customer losses, high leverage
and a distracted and depleted management team.
* Consumers wouldO
-- Miss out on the ability to benefit from:
-- expanded choice in prescription fulfillment;
-- disease management and wellness programs with
personalized information to improve healthcare
outcomes;
-- front store offers; and
-- enhanced counseling services from community
pharmacists and MinuteClinic nurse practitioners.
* Employers wouldO
-- Suffer the consequences of reduced competition in the PBM
industry, which would lead to higher prices and diminished
service.
-- Lose out on the ability to better control costs and improve
outcomes through:
-- improved formulary compliance and more appropriate
utilization of drug therapies;
-- the nation's premier specialty pharmacy program;
-- expanded clinical offerings; and
-- more robust and complete analytical capabilities.
THE CVS/CAREMARK MERGER IS IN THE BEST INTERESTS OF SHAREHOLDERS, CONSUMERS AND EMPLOYERS. PROTECT YOUR INVESTMENT! VOTE FOR THE CVS MERGER TODAY! [TABLE OMITTED] About CVS CVS is America's largest retail pharmacy, operating more than 6,200 retail and specialty pharmacy stores in 43 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . 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 CVS/pharmacy (also CVS) is a pharmacy and convenience store chain in the United States. CVS is also the largest pharmacy chain in the United States, based on the number of stores. stores; its online pharmacy  This article or section may deal primarily with the U.S. and may not present a worldwide view. , CVS.com; its retail-based health clinic subsidiary,
MinuteClinic; and its pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. , mail order and
specialty pharmacy subsidiary, PharmaCare. General information about CVS
is available through the Investor Relations Investor relationsThe process by which the corporation communicates with its investors. 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. Cautionary Statement Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc anticipated accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the , return on equity, cost synergies Cost Synergy In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join. Notes: The savings in operating costs usually come in the form of laying off employees. , incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. 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 mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. condition and general industry conditions such as the competitive environment for retail pharmacy and pharmacy benefit management companies, regulatory and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. 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 Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. and prospectus relating to the proposed merger of Caremark and CVS, was declared effective by the Securities and Exchange Commission on January January: see month. 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 solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual 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. |
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