March 8 (Bloomberg) -- Express Scripts Inc. raised its $26.1 billion hostile takeover offer for Caremark RX Inc. as U.S. antitrust regulators prepared a request for more information on the proposal.

Express Scripts, which is competing with CVS Corp. for Caremark, increased its offer by as much as 87 cents a share to $61.97. The company said the U.S. Federal Trade Commission will probably make a second request today for information on the impact an acquisition would have on the cost of drug benefits.

The winner of the two-month-old fight for Caremark, the second-largest U.S. manager of employee drug benefits, will gain clout in negotiating discounts from drugmakers. Yesterday's offer was Express Scripts' second since its December challenge to CVS's agreement to buy Caremark. CVS raised its bid twice.

Express Scripts needs ``to entice shareholders to hang in there,'' said Matt Kaufler, who helps manage $2.6 billion, including CVS shares, at Clover Capital Management in Rochester, New York. ``CVS is going to have to do something to finally wrestle this thing to the ground.''

CVS will raise its offer for Caremark today, possibly after 4 p.m. New York time, CNBC reported, without saying where it got the information or giving a specific price.

Express Scripts disclosed the new offer minutes after a Delaware judge denied attempts to have a March 16 Caremark shareholder vote on CVS's $24.9 billion proposal put on hold.

Shares of Caremark rose 54 cents to $61.84 at 10:05 a.m. in New York Stock Exchange trading. CVS gained 64 cents to $31.96, and Express Scripts climbed $1.75 to $76.52 in Nasdaq Stock Market composite trading.

Increased Offer

Express Scripts, which is based in St. Louis, said yesterday it will raise its offer about half a cent a share each day, or about 6 percent on an annual basis, starting April 1. The original offer was for $61.10 in cash and stock.

If the new bid is approved by Caremark shareholders and regulators, Express Scripts said it expects the purchase will be completed by the third quarter of this year, indicating a potential increase of between 42 cents and 87 cents a share.

CVS and Express Scripts also want Caremark to help them lure customers from Wal-Mart Stores Inc. and Medco Health Solutions Inc., the biggest benefits manager.

``Our level of confidence in obtaining ultimate approval for this transaction remains quite high and is as high as it has ever been as we've gone through this transaction,'' Thomas Boudreau, Express Scripts' general counsel, said on a conference call with analysts and investors.

Antitrust Issues

CVS, the second-biggest U.S. drugstore chain, received antitrust clearance for its offer on Dec. 20.

Express Scripts' reference to a further request for information from the FTC identifies ``serious antitrust concerns'' about their bid, CVS said in a separate statement. The company said it was pleased by the court rulings.

Chancery Judge William B. Chandler III yesterday denied a Louisiana pension fund's request to delay Caremark's shareholder vote on the CVS bid and hold Nashville, Tennessee-based Caremark in contempt for failing to properly disclose details.

Chandler also denied Express Scripts' request to delay the Caremark shareholder vote while it appealed an earlier ruling by the judge to the Delaware Supreme Court.

Brandy Bergman, a Caremark spokeswoman, declined to comment on the increased offer. Michael DeAngelis, a CVS spokesman, wasn't available for additional comment.

CVS, which first agreed to buy Caremark in November, raised its offer last month by $4 a share to $58.30 to help stave off Express Scripts' hostile bid. In January it added a $2 dividend.

Express Scripts' offer of $61.10 a share includes $29.25 in cash and the remainder in stock. The additional incentive will grow each day until the completion of its acquisition or 45 days after the FTC's approval, Express Scripts said.

`Playing Games'

``I think they are playing games,'' said Stuart Grant, a Wilmington, Delaware-based lawyer who represented the Louisiana Municipal Police Employees' Retirement System in its bid to delay the Caremark vote in hopes of starting a bidding war. ``They should put their best offer on the table and CVS should put its best offer the table and we'll let the shareholders decide.''

Separately, Express Scripts raised its earnings forecast for the year to $4.14 to $4.26 a share from an earlier estimate of $4.08 to $4.20.

Express Scripts, which is about a third of Caremark's size, withdrew its first application to the FTC on Jan. 31 in an effort to speed up regulatory review. The company re-filed a week later, giving the FTC another 30 days to review its takeover bid.

FTC spokesman Mitch Katz declined to comment.

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net; Lisa Rapaport in New York at Lrapaport1@bloomberg.net

Last Updated: March 8, 2007 10:06 EST