Forest Labs (FRX) to be Taken Over by Actavis for 25B

Shares of Forest Laboratories Inc. (FRX) were up +25.24 or +35.36 percent to $96.63 per share in pre-market trading on Tuesday, after news that Actavis Plc (ACT) had agreed to purchase the company for $25 billion. Forest Laboratories stock closed at $71.39, up +1.05 or +1.49 percent in Fridayâ s regular trading session, giving the company a valuation of $19.3 billion.

Actavis stock was up +30.32 or +15.8 percent to $222.22 per share in this morningâ s premarket trading. The stock closed at $191.88, up +0.25 or +0.13 percent in Fridayâ s regular session.
New York City based Forest Laboratories Inc. was founded in 1954 and is a major pharmaceutical company best known for its drug for the treatment of Alzheimerâ s disease, Namenda and Namenda XR. The company produces Namenda along with Lexapro, an antidepressant developed with Danish pharmaceutical company Lundbeck, in its plant in Dublin, Ireland. Dublin, Ireland based Actavis is the second largest maker of generic drugs in the world and has spent over $14 billion purchasing companies over the past few years. Formerly known as Watson Pharmaceuticals Inc. and based in Switzerland, the companyâ s 2013 purchase of Warner Chilcott Plc gave the company an Irish corporate address and its tax rate lowered from 37 percent to 17 percent. The deal, which was just announced, would have Actavis pay Forest Labs shareholders $26.04 in cash plus a portion of an Actavis share for each Forest Labs share. The total price per share would come out to $89.48 per Forest Lab share and represents a 25 percent premium over Forest Labs stock closing price on Friday, February 14th. The combined company will span generic and branded drugs and according to the latest news, will be headed by Actavis Chief Executive Paul Bisaro. Forest Laboratories Chief Executive Brent Saunders will be placed on the new companyâ s board, along with three members of Forest Laboratoriesâ board. Saunders, a former CEO for Bausch & Lomb Inc, took over as Forestâ s CEO in September. One of Saundersâ first moves with the company was the takeover of Aptalis Pharma Inc. for $2.9 billion, adding Aptalisâ treatments for cystic fibrosis and gastrointestinal ailments to Forestâ s list of pharmaceuticals. The combined company could have revenue of as much as $15 billion by 2015, according to estimates. Investors are certainly approving, with both stocks up sharply in premarket trading. The big winner in this deal however is Carl Icahn. Icahn Associates LLC, a privately held firm holds 11.7 percent of Forest Laboratories shares. Forest Laboratories shares are already trading notably higher than the $89.48 price, in part due to Actavis stock price, which is already up almost +16 percent. The latest information is that investor rights law firm Tripp Levy PLLC is seeking a higher price and additional information for Forest Shareholders. An investigation is currently underway to determine if there were any breaches of fiduciary duty or violations of state law by the Forest Board of Directors and senior management in acting in the shareholdersâ best interest. Other News About Forest Laboratories Forest Laboratories to Discontinue NAMENDA Tablets, Focus on Once-Daily NAMENDA XR Company will discontinue Namenda tablets on August 15, 2014. Forest Labs completes $2.9B purchase of Aptalis Aptalis will provide $700 million in additional revenue for Forest Labs. Other Stocks in the News Coca-Cola profit falls 8 pct Soft drink giantâ s fourth quarter profits lower. Tyson Said to Make Bid to Acquire Goldmanâ s Michael Foods Michael Foods could be worth as much as $2 billion. Copyright 2014 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Feb 18, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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