Cvs Caremark

Longs Drug Stores Corp. recommended in a regulatory filing that shareholders approve its $2.7-billion purchase by CVS Caremark Corp. even as activist investor Bill Ackman hired a firm to explore getting a higher price.

Prescription benefit manager Express Scripts Inc. said Monday that it would buy rival NextRx from WellPoint Inc. for $4.68 billion in cash and stock. St. Louis-based Express would leapfrog CVS Caremark Corp. to become the No. 2 pharmacy benefit manager, with a prescription volume approaching that of industry leader Medco Health Solutions Inc.

'My son likes a pancake syrup that is carried locally by a Longs Drug store. My guess is that in the future I'll have to ask some store to special order it for me because CVS won't carry it. Bigger is better only for the owners.' -- Warren Cereghino, Pacific Palisades, on Wednesday's story about CVS Caremark Corp.'s $2.6-billion bid to buy Longs Drug Stores Corp.

CVS Caremark Corp. agreed to pay almost $37 million to nearly two dozen states and the federal government to settle claims that the nation's largest pharmacy chain billed Medicaid programs for a more expensive form of an antacid, authorities said. The settlement came after an investigation that began in 2001, when a suburban Chicago pharmacist told authorities. Attorneys said the chain gave Medicaid patients capsules of Ranitidine, a generic version of the heartburn medication Zantac, instead of even less expensive tablets.

Caremark Rx Inc. shareholders approved a $26.5-billion takeover bid by CVS Corp., creating one of the largest competitors in the prescription drug industry, the company said. For months, CVS has been in a bidding war for Caremark with Express Scripts Inc. But increased antitrust scrutiny of the Express Scripts' proposal and its decision this week not to increase the offer turned the bidding war in CVS' favor, some analysts said. The combined company, to be called CVS/Caremark Corp.

Longs Drug Stores Corp., which has agreed to be bought by CVS Caremark Corp., said fiscal second-quarter profit rose on gains at its pharmacy-benefits division. Net income for the period that ended July 31 jumped to $27.5 million, or 76 cents a share, from $26.6 million, or 71 cents, a year earlier, Longs said. Sales increased to $1.33 billion from $1.27 billion. Shares of Longs, which is based in Walnut Creek, Calif., gained 50 cents to $72.10.

Drugstore operator CVS Caremark Corp. is planning to close all 25 of its upscale Beauty 360 stores and accompanying website as it looks to expand other cosmetic offerings. Twenty-three of those shops are located in California, including four Southland stores in Manhattan Beach, Rolling Hills Estates, Yorba Linda and Mission Viejo. All stores will be shuttered by May 19, the company said. Originally billed as a makeup destination for the "time-starved woman," Beauty 360 was conceived in 2008 as a high-end shop that carried more prestigious brands than the average CVS drugstore and offered spa-like services such as hand massages and express facials.

Longs Drug Stores Corp. repeated its refusal to enter buyout talks with Walgreen Co. or to share information with its larger rival. Longs said Walgreen "has not presented a clear road map to completion" of a deal, and was not willing to assume any risk that the deal could be rejected or delayed by antitrust regulators. Walgreen has offered to buy Longs for $75 a share, or $2.8 billion. But Longs has accepted CVS Caremark Corp.'s lower bid of $71.50 a share, or $2.7 billion. Longs' shares rose $1.58, or 2.1%, to $76.09, indicating that investors believe the company is worth even more than Walgreen has bid for it. Longs said the CVS bid -- which has already been approved by regulators -- was more likely to be completed.

TODAY → CVS Caremark Corp. is scheduled to release quarterly earnings. → Financial results are also expected from Electronic Arts Inc., Hartford Financial Services Group Inc. and Hasbro Inc. TUESDAY → Commerce Department releases wholesale trade inventories for December. → Earnings reports are expected from Coca-Cola Co., Walt Disney Co. and IAC/InterActiveCorp. WEDNESDAY → Commerce Department releases U.S. trade balance figures for December.