UPDATE: Express Scripts, Medco Say Deal Could Close Next Week
March 28 2012 - 12:11PM
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.
Shares of both companies climbed after the companies made their
projections in regulatory filings, and the gap narrowed between
Express Scripts' cash-and-stock purchase price and Medco shares.
Medco shares recently traded up 3% to $71.09, within a $1.24 of the
deal price, while Express Scripts rose 1% to $53.74.
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 despite some lingering concerns about the
combination, and that talks were taking place to resolve those
concerns.
Express Scripts 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."
"This deal will close a bit earlier than we anticipated,
potentially indicating less complex divestiture requirements from
the FTC," BMO Capital Markets analyst Dave Shove said. Wednesday's
announcement "has reinforced confidence in the viability of the
deal."
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, which was valued
at about $29 billion when first announced in July, will create the
industry's biggest company.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
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