DOVER, Del. — A Delaware judge postponed a Feb. 20 meeting scheduled by Caremark Rx Inc. for a shareholder vote on its proposed merger with CVS Corp.
Delaware Chancery Court Judge William B. Chandler III delayed any meeting until at least March 9. The $1.4 billion Louisiana Municipal Police Employees' Retirement System, Baton Rouge, represented by the law firm of Grant & Eisenhofer, led a group of institutional investors seeking the delay to give shareholders more time to evaluate the proposal.
"The court is not confident that all Caremark shareholders would be able to make an informed decision if they are required to vote on Feb. 20," Mr. Chandler wrote in his three-page decision. CVS shareholders are scheduled to vote on the merger Feb. 23.
Megan Crudele, a spokeswoman with Sard Verbinnen, a public relations firms representing Caremark, said in a statement: "With the tripling of the special cash dividend to $6 per Caremark share announced earlier today, the CVS merger now offers Caremark shareholders even greater near-term value than it did before, in addition to longer-term strategic benefits and growth opportunities. The company looks forward to obtaining shareholder approval as soon as possible and promptly closing this merger, which has already received regulatory clearance."
Caremark Rx Inc. shareholders are being advised by Egan-Jones Proxy Services to vote against the proposed merger. In a report to its clients, Egan-Jones cited the lack of a merger premium to Caremark shareholders, the absence of an open bidding process and large payments to be made to Caremark senior management in the change of control, among other reasons. Egan-Jones hasn't yet issued a recommendation on voting CVS shares, said Kent Hughes, managing director.