Do MedcoHealth Solutions Shareholders Fear a Federal Block of Express Scripts’ Takeover?

Shares of MedcoHealth Solutions (NYSE:MHS) are trading higher over 25% so far this year. The company’s stock price is high due to the Express Scripts (NASDAQ:ESRX) $29 billion takeover. However, a growing group of drugstores and pharmacists filed a federal lawsuit to put a halt on the takeover. From the perspective of ‘the little guy,’ the deal could create a gigantic pharmacy benefits manager with too much power to control the market. Do Medco’s major institutional investors fear a deal collapse?

616 institutional firms indicated owning shares of MedcoHealth Solutions Inc. (NYSE:MHS) in both Q3 2011 and Q4 2011. These firms reported owning a total of 278.397 million shares on 09/30/2011 and 290.504 million shares on 12/31/2011. The shares closed at $46.89 on 09/30/2011 and $55.90 on 12/31/2011, for an aggregate market value of $13.054 billion and $16.239 billion, respectively.

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Here are the ten largest positions in MedcoHealth Solutions Inc. at the end of December 31st, 2011.

CAPITAL RESEARCH GLOBAL INVESTORS held 33,215,232 shares on 09/30/2011 which were worth $1,557,462,228. On 12/31/2011 the firm held 29,888,900 shares worth $1,670,789,510. This represented a reduction of 3,326,332 shares or $113,327,282.

STATE STREET CORP held 16,385,182 shares on 09/30/2011 which were worth $768,301,184. On 12/31/2011 the firm held 16,852,704 shares worth $942,066,154. This represented an increase of 467,522 shares or $173,764,970.

BLACKROCK INSTITUTIONAL TRUST COMPANY N.A. held 10,450,169 shares on 09/30/2011 which were worth $490,008,424. On 12/31/2011 the firm held 16,830,211 shares worth $940,808,795. This represented an increase of 6,380,042 shares or $450,800,370.

VANGUARD GROUP INC held 15,350,357 shares on 09/30/2011 which were worth $719,778,240. On 12/31/2011 the firm held 15,367,577 shares worth $859,047,554. This represented an increase of 17,220 shares or $139,269,315.

JANUS CAPITAL MANAGEMENT LLC held 15,876,535 shares on 09/30/2011 which were worth $744,450,726. On 12/31/2011 the firm held 14,647,613 shares worth $818,801,567. This represented a reduction of 1,228,922 shares or $74,350,841.

FMR LLC held 9,157,705 shares on 09/30/2011 which were worth $429,404,787. On 12/31/2011 the firm held 11,639,717 shares worth $650,660,180. This represented an increase of 2,482,012 shares or $221,255,393.

FRANKLIN RESOURCES INC held 4,968,313 shares on 09/30/2011 which were worth $232,964,197. On 12/31/2011 the firm held 9,896,147 shares worth $553,194,617. This represented an increase of 4,927,834 shares or $320,230,421.

BANK OF NEW YORK MELLON CORP held 8,440,733 shares on 09/30/2011 which were worth $395,785,970. On 12/31/2011 the firm held 8,679,022 shares worth $485,157,330. This represented an increase of 238,289 shares or $89,371,359.

D. E. SHAW & CO. INC. held 5,445,198 shares on 09/30/2011 which were worth $255,325,334. On 12/31/2011 the firm held 5,880,848 shares worth $328,739,403. This represented an increase of 435,650 shares or $73,414,069.

MONTAG & CALDWELL LLC held 4,238,496 shares on 09/30/2011 which were worth $198,743,077. On 12/31/2011 the firm held 5,174,114 shares worth $289,232,973. This represented an increase of 935,618 shares or $90,489,895.

About the company: Medco Health Solutions, Inc. is a pharmacy benefit manager. The Company provides programs and services for its clients and the members of their pharmacy benefit plans, and for the physicians and pharmacies the members use.

To contact the reporter on this story: Alex Capel at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com