Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of MedcoHealth Solutions (NYSE: MHS) leaped 13% in early trading today.

So what: Rival pharmacy benefits manager Express Scripts (Nasdaq: ESRX) offered to buy its competitor in a combined cash-and-stock deal that values Medco at $73.58 per share at Express Scripts' current share price (in addition to $28.80 in cash, each Medco share will be replaced with 0.81 share of Express Scripts).

Now what: Managers at the two companies, both of which back the combination, say the tie-up will create $1 billion worth of "synergies." Medco shareholders don't seem to believe it, or at least don't seem to believe the deal will go through (possibly because of antitrust concerns). As of this writing, Medco shares are still trading more than $10 below the putative acquisition price.

They should hope it does go through, however, because Express Scripts is offering them a great exit price from their stock: as much as 22 times trailing earnings for a company that's only expected to grow earnings at about 15% per year going forward, and that may fail to accomplish even that. Next year, Medco loses a major customer when UnitedHealth Group (NYSE: UNH) takes its pharmacy benefits work in-house.

My advice: This deal may or may not close by the planned first half of 2012, and while the chance to earn an extra 16% on your investment is tempting, the price Mr. Market offers today is already more than fair. I'd take it.

Will they or won't they tie the knot? Add Medco and Express Scripts to your watchlist and find out.

Fool contributor Rich Smith holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of UnitedHealth Group and MedcoHealth Solutions. Motley Fool newsletter services have recommended buying shares of MedcoHealth Solutions and UnitedHealth Group. Motley Fool newsletter services have also recommended creating a diagonal call position in UnitedHealth Group.

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