Alere Inc (ALR) Shares jump 45% After Acquisition by Abbott (ABT) for $56/share


Shares of Alere Inc (NYSE:ALR) are up over 45% this morning in the pre-market after the company announced that they have reached an agreement with Abbott (NYSE:ABT). The definitive agreement sees Abbott acquiring the company for $56 per common share, an equity value of $5.8 billion. This makes Abbott the leading diagnostics provider of point of care testing, with sales that will exceed $7 billion after the closing of the deal.

“The combination of Alere and Abbott will create the world’s premier point of care testing business and significantly strengthen and grow Abbott’s diagnostics presence,” said Miles D. White, chairman and chief executive officer, Abbott. “We want to offer our customers the best and broadest diagnostics solutions. Alere helps us do that.”

Investors are flocking to the stock this morning. Even after the 45% uptick, shares still stand at almost $2.00 under the acquisition price of $56, at $54.02. Alere Inc (NYSE:ALR) has relied heavily on the United States for a good portion of their sales, as $2.5 billion in sales are from the U.S. alone — making up more than half of all their sales.

The deal has already been approved by Alere board of directors, as well as those of Abbott. It is still subject to the approval of Alere shareholders and the satisfaction of other customary closing conditions. The stock decreased 0.05% or $0.02 during the last trading session, hitting $37.18. About 1.86 million shares traded hands or 80.58% up from the average. ALR has declined 28.17% since June 25, 2015 and is downtrending. It has underperformed the S&P500 by 17.96%.

From a total of 3 analysts covering Alere (NYSE:ALR) stock, 2 rate it a “Buy”, 0 a “Sell”, and 1 a “Hold”. This means that 67% of the ratings are positive. The highest target price is $52.0 while the lowest target price is $39. The mean of all analyst targets is $47 which is 26.41% above today’s ($37.18) stock price. Alere was the topic of 5 analyst reports since August 4, 2015 according to the firm StockzIntelligence Inc. Canaccord Genuity maintained shares on November 5 with a “Buy” rating. TheStreet upgraded ALR stock in a recent report from August 14 to a “Hold” rating.

The institutional sentiment decreased to 0.85 in Q2 2015. It’s down 0.45, from 1.3 in 2015Q2. The ratio is negative, as 34 funds sold all their Alere Inc shares they owned while 80 reduced their positions. 27 funds bought stakes while 70 increased their total positions. Institutions now own 92.39 million shares which is 15.51% more than the previous share count of 79.99 million in 2015Q2.

Steinberg Asset Management Llc holds 7.67% of its total portfolio in Alere Inc, equating to 1.03 million shares. Sls Management Llc owns 198,005 shares representing 7.28% of their total US portfolio. Moreover, Edgepoint Investment Group Inc. has 6% of their total portfolio invested in the company, equating to 6.26 million shares. The Florida-based Private Capital Management Llc has a total of 5.4% of their portfolio invested in the stock. Mcclain Value Management Llc, a Connecticut-based fund reported 344,158 shares owned.

Since March 18, 2015, the stock had 0 insider purchases, and 5 insider sales for a total of $3.81 million in net activity. Gladwell Mark sold 2,651 shares worth $138,555. Guerdan Melissa sold 5,135 shares worth $267,020. Malkani Sanjay sold 31,460 shares worth $1.72M. Bridgen John sold 22,564 shares worth $1.15M. The insider Goldberg Carol R sold 110 shares worth $4,341.

Alere Inc. is a provider of health information through diagnostic tests. The company has a market cap of $3.21 billion. The Firm operates through professional diagnostics, patient self-testing, consumer diagnostics and, corporate and other divisions. It currently has negative earnings. The professional diagnostics segment includes an array of diagnostic test products and other in vitro diagnostic tests marketed to medical professionals and laboratories for detection of diseases and conditions within its areas of focus.