CMX Caremark RX

ST. LOUIS, Jan. 8 /PRNewswire-FirstCall/ -- Express Scripts, Inc. (NASDAQ:ESRX) today issued the following statement in response to the announcement by Caremark Rx, Inc. (NYSE:CMX) that its Board of Directors has rejected the Express Scripts offer: "Our offer represents a superior proposal. Caremark stockholders and the marketplace as a whole have demonstrated their strong support for our offer, which clearly provides Caremark stockholders with superior value to the proposed acquisition of Caremark by CVS Corporation (NYSE:CVS). The advantages of an Express Scripts-Caremark combination are compelling. We remain committed to pursuing a combination of our two companies to create superior value for our respective stockholders, plan sponsors and patients. We believe that Caremark is attempting to use antitrust as a red herring to distract stockholders from the real value differential at issue. Our cash and stock offer provides Caremark stockholders with a premium of approximately 13% to the proposed CVS acquisition price, based on the closing stock prices as of January 5, 2007. Importantly, the Express Scripts offer also allows Caremark stockholders the ability to participate in the combined company's substantial upside potential. We expect to enhance value for stockholders through an increase in the value of the combined company's stock price resulting from EPS growth driven by estimated annualized cost synergies of $500 million. Since the time of our announcement, Caremark has conveniently found in excess of 25% in additional synergies, which had not been evident since they announced their transaction on November 1, 2006. Express Scripts has a proven track record of integrating and optimizing the performance of our acquired businesses, thereby creating additional value for stockholders, having completed five successful acquisitions since 1998. Express Scripts expects the combined company will generate substantial free cash flow, which will enable it to consistently and rapidly reduce acquisition-related debt, return to historical leverage levels and continue to invest in the company. We are confident that we can successfully integrate Caremark and Express Scripts in a way that would quickly maximize the benefits for our respective stockholders, plan sponsors and patients. We note that based on our past experience, each time we have acquired another PBM, the ensuing merged company increased in the number of customers beyond what both had initially. Furthermore, our historical stock price performance has been outstanding and superior to CVS. As a combined company, Express Scripts and Caremark will have growth opportunities that provide significant upside potential to stockholders of both companies." On December 18, 2006, Express Scripts announced its proposal to acquire Caremark for $29.25 in cash and 0.426 shares of Express Scripts stock for each share of Caremark stock. Based on Friday's closing stock prices, the Express Scripts offer has a value of $58.58 per share, or $25.5 billion in the aggregate, and provides Caremark stockholders with a 13% premium to the current value of the CVS proposal. Furthermore, the Express Scripts offer represents a 22% premium over the average closing stock price of Caremark between November 1, 2006, the day its proposed acquisition by CVS was announced, and December 15, 2006, the last day of trading before the Express Scripts offer was announced. As previously announced, Express Scripts has received commitment letters from Citigroup Corporate and Investment Banking and Credit Suisse to fully finance the proposed transaction. On January 3, 2007, the Company filed the premerger notification and report form pursuant to the Hart-Scott-Rodino Antitrust Improvements Act in connection with the acquisition of shares of Caremark and anticipates obtaining regulatory clearance in a timely manner. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Express Scripts, and Citigroup Corporate and Investment Banking and Credit Suisse are acting as financial advisors. MacKenzie Partners, Inc. is acting as proxy advisor to Express Scripts. About Express Scripts Express Scripts, Inc. is one of the largest PBM companies in North America, providing PBM services to over 50 million members. Express Scripts serves thousands of client groups, including managed-care organizations, insurance carriers, employers, third-party administrators, public sector, and union-sponsored benefit plans. Express Scripts provides integrated PBM services, including network- pharmacy claims processing, home delivery services, benefit-design consultation, drug-utilization review, formulary management, disease management, and medical- and drug-data analysis services. The Company also distributes a full range of injectable and infusion biopharmaceutical products directly to patients or their physicians, and provides extensive cost- management and patient-care services. Express Scripts is headquartered in St. Louis, Missouri. More information can be found at http://www.express-scripts.com/, which includes expanded investor information and resources. Safe Harbor Statement This press release contains forward-looking statements, including, but not limited to, statements related to the Company's plans, objectives, expectations (financial and otherwise) or intentions. Actual results may differ significantly from those projected or suggested in any forward-looking statements. Factors that may impact these forward-looking statements include but are not limited to: * uncertainties associated with our acquisitions, which include integration risks and costs, uncertainties associated with client retention and repricing of client contracts, and uncertainties associated with the operations of acquired businesses * costs and uncertainties of adverse results in litigation, including a number of pending class action cases that challenge certain of our business practices * investigations of certain PBM practices and pharmaceutical pricing, marketing and distribution practices currently being conducted by the U.S. Attorney offices in Philadelphia and Boston, and by other regulatory agencies including the Department of Labor, and various state attorneys general * changes in average wholesale prices ("AWP"), which could reduce prices and margins, including the impact of a proposed settlement in a class action case involving First DataBank, an AWP reporting service * uncertainties regarding the implementation of the Medicare Part D prescription drug benefit, including the financial impact to us to the extent that we participate in the program on a risk-bearing basis, uncertainties of client or member losses to other providers under Medicare Part D, and increased regulatory risk * uncertainties associated with U.S. Centers for Medicare & Medicaid's ("CMS") implementation of the Medicare Part B Competitive Acquisition Program ("CAP"), including the potential loss of clients/revenues to providers choosing to participate in the CAP * our ability to maintain growth rates, or to control operating or capital costs * continued pressure on margins resulting from client demands for lower prices, enhanced service offerings and/or higher service levels, and the possible termination of, or unfavorable modification to, contracts with key clients or providers * competition in the PBM and specialty pharmacy industries, and our ability to consummate contract negotiations with prospective clients, as well as competition from new competitors offering services that may in whole or in part replace services that we now provide to our customers * results in regulatory matters, the adoption of new legislation or regulations (including increased costs associated with compliance with new laws and regulations), more aggressive enforcement of existing legislation or regulations, or a change in the interpretation of existing legislation or regulations * increased compliance relating to our contracts with the DoD TRICARE Management Activity and various state governments and agencies * the possible loss, or adverse modification of the terms, of relationships with pharmaceutical manufacturers, or changes in pricing, discount or other practices of pharmaceutical manufacturers or interruption of the supply of any pharmaceutical products * the possible loss, or adverse modification of the terms, of contracts with pharmacies in our retail pharmacy network * the use and protection of the intellectual property we use in our business * our leverage and debt service obligations, including the effect of certain covenants in our borrowing agreements * our ability to continue to develop new products, services and delivery channels * general developments in the health care industry, including the impact of increases in health care costs, changes in drug utilization and cost patterns and introductions of new drugs * increase in credit risk relative to our clients due to adverse economic trends * our ability to attract and retain qualified personnel * other risks described from time to time in our filings with the SEC Risks and uncertainties relating to the proposed transaction that may impact forward-looking statements include but are not limited to: * Express Scripts and Caremark may not enter into any definitive agreement with respect to the proposed transaction * required regulatory approvals may not be obtained in a timely manner, if at all * the proposed transaction may not be consummated * the anticipated benefits of the proposed transaction may not be realized * the integration of Caremark's operations with Express Scripts may be materially delayed or may be more costly or difficult than expected * the proposed transaction would materially increase leverage and debt service obligations, including the effect of certain covenants in any new borrowing agreements. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Important Information Express Scripts intends to file a proxy statement in connection with Caremark's special meeting of stockholders at which the Caremark stockholders will consider the CVS Merger Agreement and matters in connection therewith. Express Scripts stockholders are strongly advised to read that proxy statement and the accompanying GOLD proxy card when they become available, as they will contain important information. Stockholders will be able to obtain that proxy statement, any amendments or supplements to that proxy statement and other documents filed by Express Scripts with the Securities and Exchange Commission ("SEC") free of charge at the SEC's website (http://www.sec.gov/) or by directing a request to MacKenzie Partners, Inc., at 800-322-2885 or by email at . In addition, this material is not a substitute for the prospectus/proxy statement Express Scripts and Caremark would file with the SEC if an agreement between Express Scripts and Caremark is reached or any other documents which Express Scripts may send to shareholders in connection with the proposed transaction. Investors are urged to read any such documents, when available, because they will contain important information. Such documents would be available free of charge at the SEC's website (http://www.sec.gov/) or by directing a request to MacKenzie Partners, Inc., at 800-322-2885 or by email at . Express Scripts and its directors, executive officers and other employees may be deemed to be participants in any solicitation of Express Scripts or Caremark shareholders in connection with the proposed transaction. Information about Express Scripts' directors and executive officers is available in Express Scripts' proxy statement, dated April 18, 2006, for its 2006 annual meeting of stockholders. Additional information about the interests of potential participants will be included in any proxy statement filed in connection with the proposed transaction. This material relates to a business combination transaction with Caremark proposed by Express Scripts which may become the subject of a registration statement filed with the SEC. Investors and security holders are advised to read this document and all other applicable documents if and when they become available because they will include important information. Investors and security holders may obtain a free copy of any documents filed by Express Scripts with the SEC at the SEC's website (http://www.sec.gov/) or by directing a request to MacKenzie Partners, Inc. at the telephone number and email address set forth above. DATASOURCE: Express Scripts, Inc. CONTACT: Investor Contacts - Edward Stiften, Chief Financial Officer or David Myers, Vice President, Investor Relations, +1-314-702-7173, or Media Contacts - Steve Littlejohn, Vice President, Public Affairs, +1-314-702-7556, all of Express Scripts, Inc.; or Joele Frank, or Steve Frankel, both of Joele Frank, Wilkinson Brimmer Katcher, +1-212-355-4449 Web site: http://www.express-scripts.com/

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