Leerink Boosts PT on Alere (ALR) to $56; Doesn't See Regulatory Issues, Stronger Bid Above Abbott (ABT)

Leerink affirms its Alere (NYSE: ALR) at Market Perform an lifts its price target from $50 to $56 following news that Abbott (NYSE: ABT) moved to acquire the company.

Analyst Dan Leonard commented, We view a topping bid and regulatory challenges to today’s deal as unlikely given the 50% takeout premium to ALR’s most recent closing price and minimal revenue overlap, respectively. We think the deal could close by year-end.

Leonard continued, We don’t envision a topping bidder nor meaningful regulatory challenges. Our thoughts on a topping bidder reflect our belief that the asset was thoroughly shopped, as well as the 50% premium to ALR’s pre-announce share price. On the regulatory front, we think revenue overlap is minimal at ~$50M-$100M (2%-4% of 2015 revs). Additionally, ALR’s revenues derived from China, which we think some investors may view as a regulatory impediment, are minimal at ~$100M (~4% of 2015 revs). Management did not give definitive guidance around expected timing for deal close but we think by calendar year-end a good approximation.

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