UBS Maintains a 'Neutral' on PharMerica (PMC); Raising Target On Acquisition Prospects

UBS maintains a 'Neutral' on PharMerica (NYSE: PMC) price target raised $2 to $15.

UBS analyst says, "OCR Battle For PMC Continues - On Friday, Omnicare (NYSE: OCR) issued an ‘open letter’ to PMC shareholders reminding them to tender shares of PMC into the OCR $15 per share offer by October 4. Recall that in conjunction with OCR’s tender offer, the company is seeking to acquire a simple majority stake (>50%) in shares of PMC in an effort to persuade PMC’s board to accept the current $15 per share offer."

"How critical is the tender offer outcome this week? - In our view, if >50% of PMC shares are tendered this week, it would serve as a signal to PMC mgmt/board that a majority of shareholders do NOT see greater value in the company beyond the current $15 per share offer. By contrast, if <50% of total PMC shares outstanding are tendered, this may signal that the current $15 per share may not be high enough to consummate a transaction. Depending on how far under 50%, OCR would then either extend the tender offer deadline (most likely) or increase its current offer (less likely in the short-term, in our view)."

For more ratings news on PharMerica click here and for the rating history of PharMerica click here.

Shares of PharMerica closed at $14.27 yesterday.

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