Fitch leaves Caremark ratings unchanged |
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Thu, 18 Jan 2007 07:23
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CHICAGO (AFX) - Fitch Ratings said Wednesday that drugstore operator CVS Corp.'s sweetened bid for Caremark Rx does not change the pharmacy benefits manager's issuer default and unsecured bank credit facility ratings of 'BBB.'Fitch also left Express Scripts Inc. issuer default and unsecured bank credit facility ratings at 'BBB.' Express Scripts is competing with CVS to acquire Caremark.CVS increased its bid for Caremark late Tuesday by offering Caremark shareholders a one-time cash dividend of $2 per share and a buyback of 150 million shares after approval, on top of the current stock offer worth $21.2 billion. The bid is in response to Express Scripts Inc.'s move to top CVS's offer with a cash and stock deal worth about $25 billion.Fitch kept Express Script on negative watch, meaning it is a candidate for a ratings downgrade.'If Express Scripts succeeds in acquiring CMX, the transaction could result in a significant increase in leverage, which Fitch views as a potential negative for Express Scripts' and CareMark's credit ratings,' the agency said in a statement.Caremark shares added $1.70, or 3 percent, to $57.95 in recent trading on the New York Stock Exchange. Express Scripts climbed $1.31, or 2 percent, to $67.02 on the Nasdaq.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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