Express Scripts, Medco Say Deal Could Close Next Week
28 Mars 2012 - 3:47PM
Dow Jones News
Pharmacy-benefit managers Express Scripts Inc. (ESRX) and Medco
Health Solutions Inc. (MHS) said Wednesday their planned deal could
close as early as next week, indicating they believe they are close
to securing regulatory approval.
The companies have been waiting for a green light from the
Federal Trade Commission amid strong opposition from pharmacy trade
groups and consumer advocates. The Wall Street Journal reported
earlier this month that the FTC appeared increasingly unlikely to
block the deal, but still had some concerns about the combination,
and that talks were taking place to resolve them.
Express Scripts--which aims to acquire Medco in a cash-and-stock
deal valued at about $29 billion when first announced--declined to
comment on the status of the FTC discussions. But both companies
said in regulatory filings that they may be in a position to close
the deal as early as the week of April 2, "subject to satisfaction
or waiver of the remaining closing conditions."
Shares of Express Scripts rose 4.6% to $55.65 in premarket
trading while shares of Medco rose 5.6% to $72.85. While Medco
shares traded far below the planned purchase price after the deal
was announced, indicating doubt about whether the companies could
win over antitrust regulators, the gap has narrowed significantly
as the companies progress toward completing the deal. As of
Tuesday's close, the deal price was 4.2% above Medco's price.
The companies on March 12 said they were working with the FTC to
secure approval for the planned deal, which they expected at that
time to complete in the "earlier part" of the second quarter.
Pharmacy-benefit managers, or PBMs, handle drug benefits for
corporations and health plans. The planned deal will create the
industry's biggest company.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
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