The Delaware judge tries to play Solomon.

He refused to invalidate a $675 million breakup fee aimed at protecting the proposed acquisition of Caremark, the big PBM, by CVS, the big retailer. But the decision by Chancellor Bill Chandler III makes it possible for shareholders to eventually vote on the deal.

“Only in extraordinary circumstances will this court substitute its business judgment for that of directors, or usurp the rights of shareholders to make their own informed decisions,” wrote in denying a preliminary injunction sought by Express Scripts, another big PBM, and two Caremark institutional shareholders.

“Although plaintiffs allege facts concerning the process by which the deal was negotiated that trouble the court, very few of their arguments suggest that I am in a better position than Caremark’s shareholders to make the ultimate decision.” You can see the opinion here.

Chandler did order Caremark to disclose more info to shareholders within 20 days before they can vote on the deal. And he said Caremark shareholders can seek an appraisal of their shares and learn what the PBM’s bankers will make in fees from the CVS deal. Caremark’s board was criticized by shareholder advisory firms for not disclosing more info or open the bidding.

Stu Grant, a lawyer for the Caremark institutional shareholders, says he was “thrilled,” in part, because the judge didn’t chase away any bidder with a broad injunction, and also warned the Caremark directors that they may have breached its fiduciary duties.

Okay, but why should shareholders have to go to court to learn this stuff?

[tags]Caremark, CVS, Express Scripts[/tags]