Options Whittling Down for Endo Health (ENDP) as CEO Holveck Departs

February 11, 2013 8:32 AM EST Send to a Friend
According to Bloomberg, Endo Health Solutions Inc. (Nasdaq: ENDP) has just two solutions left: sell or be sold.

CEO Dave Holveck is resigning his position just a few years after paying $3 billion for American Medical Systems Holdings, causing Endo shares to fall about 27 percent in the process. He is expected to leave the firm in May, or whenever a successor is found.

Endo's largest shareholder, Fidelity Investments, is now pushing for a sale of Company, Bloomberg notes today. Analysts expect that Endo might garner a 26 percent premium on a deal,or $37.50 per share, with Teva Pharma (NYSE: TEVA) and Covidien's (NYSE: COV) spin-off Mallinckrodt two potential acquirers. Valeant Pharma (NYSE: VRX) and Warner Chilcott (Nasdaq: WCRX) may also be potential buyers for Endo's pain drugs unit. Private equity might also get in the mix, though specific firms weren't named.

Fidelity had met with Endo's Board serveal times in 2012, calling for the ousting of Hoveck in the meetings.

Going for 8.6 times trailing 12 month earnings, Endo is nearly the cheapest stock in the specialty pharma sector. The average multiple of Endo's peers is about 27 times with Warner Chilcott trading at just 7.6 times earnings.

Endo didn't comment on the speculation today. Shares are flat in early trading.


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