Why Alere Inc (ALR) Shares Have Surged Today

Alere Inc (NYSE:ALR) shares have spiked over 7% in mid-day trading after Bloomberg reported that Alere has asked a Delaware judge to uphold a report espousing Abbott produce summaries and notes from its due diligence calls and meetings for their previously agreed merger. Alere believes that it has (perhaps through the notes) already provided Abbott with ‘substantial written and oral’ information over the company’s sales recognition methods, and various communications with various government agencies including the FDA. Abbott had previously agreed to buy Alere Inc (NYSE:ALR) but had latter wanted to back away from the deal after the DOJ and other government agencies began probing Alere.

The two have gone to court, with Alere trying to uphold the sale, and Abbott trying to successfully terminate the merger. If Alere wins the case and there is no renegotiation of the merger terms, the stock could have substantial upside. Abbott previously agreed to buy Alere for $56 in cash per share.

What Does The Smart Money Sentiment Say?

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Our data shows that the smart money was pretty bullish on Alere in the fourth quarter. Of the 742 elite funds we track, 44 funds owned $997.26 million of Alere Inc (NYSE:ALR) and accounted for 29.40% of the float on December 31, versus 44 funds and $1.1 billion respectively on September 30. Ric Dillon‘s Diamond Hill Capital inched up its holdings by 5% quarter-over-quarter to slightly over 2.4 million shares.

The Bottom Line

Alere Inc (NYSE:ALR) shares are higher on speculation that its merger with Abbott is more likely to go through. For more reading, check out ‘16 Types of Healthcare Jobs In The Medical Field That Pay Well‘.

Disclosure:None

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