Shareholders who claim that Caremark Rx Inc. insiders are looking out for themselves instead of general stock owners by pursuing a merger deal with CVS Corp. lost a bid Friday to get a judge to order the company to consider a hostile buyout bid by rival Express Scripts Inc.

U.S. District Court Judge Aleta Trauger rejected a motion filed late Thursday in a lawsuit that challenges the CVS deal, saying that Nashville-based Caremark had indicated it intends to consider the Express Scripts offer.

"It is reasonable to suppose that this review will be taking place after the New Year," the judge wrote. "Certainly the plaintiff has failed to establish anything contrary to that reasonable assumption."

Paul Warner, an Houston-based attorney for the plaintiffs in the lawsuit, said the plaintiffs would ask Trauger early next week to reconsider the motion.

Woonsocket, R.I.-based CVS, the nation's largest operator of drugstores, said on Nov. 1 that it planned to acquire Caremark for about $21.2 billion in stock.

Maryland Heights, Mo.-based Express Scripts launched its $26 billion bid for Caremark Monday. Caremark and Express Scripts are the No. 2 and No. 3 largest pharmacy benefits managers in the country.

The CVS offer is for stock in the company, and the Express Scripts offer includes a cash option and premium for shareholders.

Caremark and CVS announced Thursday that their deal has passed the antitrust scrutiny of the U.S. Federal Trade Commission and could be completed by the first quarter of 2007.

The lawsuit filed last month by the Iron Workers of Western Pennsylvania Pension Plan contends the CVS agreement would "provide certain Caremark insiders and directors with preferential treatment."

It points in particular to a "golden parachute" for Caremark President and CEO Edwin "Mac" Crawford that totals $48 million in stock, severance payments and consulting fees. Other executives would keep their positions as well.

Shareholders, by contrast, would get 1.67 shares of CVS stock for each share of Caremark stock they own for a value of approximately $52 per share. Caremark shares traded as high as $59.25 in September and has been in the mid-50s since the Express Scripts offer was publicized.

"We're not trying to stop the deal dead in its track," said Warner, the plaintiff's attorney. "We're trying to take out some of these unfair provisions."

A spokeswoman for Caremark and Crawford said they had no comment on the lawsuit. Three of the board members contacted Friday didn't immediately return phone messages seeking comment.

Caremark's stock rose 85 cents to $57 and CVS stock was up 33 cents, or 1 percent, to $31.25 on the New York Stock Exchange Friday. Express Scripts shares fell $1.14, or 1.6 percent, to $72.33 on the Nasdaq Stock Market.

Eleanor Bloxham, president of The Value Alliance and Corporate Governance Alliance in Westerville, Ohio, said that benefits in the CVS offer to Crawford and other executives doesn't necessarily mean the deal is a bad one.

"The deal could still be a good deal. I think the concern is when you have incentive structures that reward for certain deals ... then you get into a situation where you may cause an action that isn't in the best interest," she said.

Bloxham said Caremark needed to review both offers to see which one provided the best value to the shareholders.

The lawsuit also claims that Crawford made more than $63 million last year through stock option transactions and currently holds roughly $249 million worth of options while the share price has been beaten down since Caremark announced in May that it the Securities and Exchange Commission is investigating the potential backdating of stock options and its relocation program for top executives.

Crawford succeeded former HealthSouth CEO Richard Scrushy as both CEO and chairman of the board in 1998, when the company headquarters were in Birmingham, Ala. Caremark relocated to Nashville in 2004.

Scrushy was acquitted of charges of accounting fraud at HealthSouth after 15 former executives pleaded guilty. But he was convicted this year along with former Alabama Gov. Don Siegelman in a scheme in which Siegelman appointed Scrushy to an influential hospital regulatory board in exchange for Scrushy arranging $500,000 in contributions to Siegelman's 1999 campaign for a statewide lottery.

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On the Net:

Caremark Rx: http://www.caremark.com/

CVS Corp: http// http://www.cvs.com/

Express Scripts Inc.: http://www.express-scripts.com/