Unsealed Alere (ALR), Abbott (ABT) Litigation Points to Possible Divestitures - BTIG

August 31, 2016 3:32 PM EDT
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Price: $40.27 -0.02%

Rating Summary:
    6 Buy, 6 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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BTIG affirms Alere, Inc. (NYSE: ALR) with a Buy rating and $48 price target after the company's litigation with Abbott (NYSE: ABT) was unsealed.

Analyst Dane Leone noted, The most important datapoint is the heavily redacted portion that lists the possibility of potential divestments by Abbott. As we have pointed out, even if we assume that Alere divested its entire Triage meter-based Cardiology platform and the EPOC blood-gas analyzer, ~$147m in global sales during 2014 and ~$30m sales, respectively, we do not think it would be prohibitive to the merger agreement.

Other key points highlighted:

  • Allen specifically stated that Abbott would attempt to claim some material breach of the representations and warranties contained in the Merger Agreement...
  • White reiterated these threats at a follow-up meeting with Alere's Chairman, Gregg J. Powers, and its President and Chief Executive Officer, Namal Nawana, informing both that Abbott would spare no expense in making life a 'living hell' for everyone at Alere, including by drowning Alere in a sea of forensic-level informational demands...
  • Abbott has purposefully failed to supply information expressly requested by the FTC. Three months ago, on May 2, 2016, the FTC issued a request for additional information and documentary materials (the 'Second Request').

For an analyst ratings summary and ratings history on Alere click here. For more ratings news on Alere click here.

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