UPDATE: Express Scripts, Medco Say Deal Could Close Next Week

Pharmacy-benefit managers Express Scripts Inc. (ESRX) and Medco Health Solutions Inc. (MHS) said Wednesday their planned deal could close as early as next week, indicating they believe they are close to securing regulatory approval.

Shares of both companies climbed after the companies made their projections in regulatory filings, and the gap narrowed between Express Scripts' cash-and-stock purchase price and Medco shares. Medco shares recently traded up 3% to $71.09, within a $1.24 of the deal price, while Express Scripts rose 1% to $53.74.

The companies have been waiting for a green light from the Federal Trade Commission amid strong opposition from pharmacy trade groups and consumer advocates. The Wall Street Journal reported earlier this month that the FTC appeared increasingly unlikely to block the deal despite some lingering concerns about the combination, and that talks were taking place to resolve those concerns.

Express Scripts declined to comment on the status of the FTC discussions. But both companies said in regulatory filings that they may be in a position to close the deal as early as the week of April 2, "subject to satisfaction or waiver of the remaining closing conditions."

"This deal will close a bit earlier than we anticipated, potentially indicating less complex divestiture requirements from the FTC," BMO Capital Markets analyst Dave Shove said. Wednesday's announcement "has reinforced confidence in the viability of the deal."

The companies on March 12 said they were working with the FTC to secure approval for the planned deal, which they expected at that time to complete in the "earlier part" of the second quarter.

Pharmacy-benefit managers, or PBMs, handle drug benefits for corporations and health plans. The planned deal, which was valued at about $29 billion when first announced in July, will create the industry's biggest company.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; [e-mail]