Yesterday a Delaware judge, Chancellor William B. Chandler III, stepped into a takeover battle between CVS Corp. (NYSE: CVS), CareMark Rx, Inc. (NYSE: CMX), and Express Scripts, Inc. (NYSE: ESRX) because CMX's board has fallen down on the job.

For the last several weeks, I've been a fairly lonely voice in the wilderness (: <) railing against how CMX directors were low-balling its shares to CVS in order to protect CMX's management team. At one point, ESRX's bid was $5 billion above CVS's. I made such comments here, here, here and here.

But in the last week, I've gotten some company -- specifically, Glass, Lewis & Co., CtW Investment Group and Institutional Shareholder Services said that CMX's board is not getting the best deal for its shareholders and urged, before the latest CVS offer, that Caremark shareholders reject the bid.

Yesterday there was a new development. Chandler intervened to delay the shareholder vote on the CVS/CMX deal from February 20 to at least March 9. A major shareholder, Louisiana Municipal Police Employees' Retirement System (LMPERS), sued for more time to consider the CVS offer. The judge granted LMPERS's request after reading an SEC filing in which CMX disclosed that it met with ESRX in 2001, 2003 and most recently in 2005 to review potential transactions -- meetings which Chandler concluded a reasonable shareholder would find "highly relevant." Chandler also set an injunction hearing for February 16, which could possibly halt or delay the CVS deal.

Continue reading Judge intervenes where Caremark directors fear to tread

Judge intervenes where Caremark directors fear to tread originally appeared on BloggingStocks on Wed, 14 Feb 2007 12:37:00 EST. Please see our terms for use of feeds.