Express Scripts Inc. bid to acquire a competing pharmacy benefits manager, challenging a pharmacy chain’s offer to buy the same company.

Express Scripts, St. Louis, proposed to acquire all outstanding shares of Caremark Rx Inc., Birmingham, Ala., for $29.25 in cash and about 0.4 shares of its own stock for each Caremark share.

Its bid topped a competing offer by the drugstore chain CVS Corp., Woonsocket, R.I. Based on Express Scripts’ closing stock price on Friday, December 15th, the pharmacy benefits manager’s offer has a total value of $26 billion.

Express Scripts says its offer represents a 15% premium over the all-stock purchase price proposed by CVS Corporation.

If the deal is completed, Caremark stockholders would own around 57% of the combined company, compared to 43% held by Express Scripts stockholders, according to the bid announcement. Express Scripts expects the proposed deal would be completed in the third quarter of 2007.

The transaction would create annual cost savings of around $500 million for the combined firm, Express Scripts estimates.