UPDATE 1-Glass Lewis remains against CVS bid for Caremark
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PHILADELPHIA, March 14 (Reuters) - Proxy advisory firm Glass Lewis & Co. on Wednesday reaffirmed its recommendation that Caremark Rx Inc. CMX.N shareholders should reject a takeover bid from CVS Corp. (CVS.N) due to a flawed auction process.
"We are troubled that the Caremark directors failed to promote a competitive bidding or partnering process," Glass Lewis said in a report. "Investors should remain concerned that the board of Caremark has not done all it could to ensure that shareholders stand to receive the highest value in any sale or merger."
Caremark has accepted a sweetened takeover bid of $23.5 billion from drugstore chain CVS and rejected a hostile $27.8 billion offer from rival pharmacy benefits manager Express Scripts Inc. (ESRX.O).
On Tuesday, proxy advisory firm Institutional Shareholder Services reversed its stance and recommended that Caremark shareholders vote in favor of the improved CVS offer.
A third proxy advisory firm, Proxy Governance, on Tuesday said Caremark shareholders should reject the CVS offer. The group said that it was concerned about the process of selling the company, Caremark Chief Executive Mac Crawford's payout and the possibility of Caremark options backdating, which the company has denied.
CVS shareholders will vote on the deal on March 15, while Caremark shareholders will vote on March 16.
((Reporting by Jessica Hall, editing by Gerald E. McCormick; jessica.hall@reuters.com; 215-922-1086)) Keywords: CAREMARK GLASSLEWIS/
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