Mylan Options Surge on Speculation of Pfizer Takeover - Bloomberg

Mylan Options Surge on Speculation of Pfizer Takeover (Update1)

By Pat Wechsler and Jeff Kearns

Mylan Inc. climbed to the highest intraday level in four years and trading of bullish options surged the most since July on speculation that the biggest U.S. maker of generic drugs may be acquired by Pfizer Inc.

More than 32,000 calls to buy the stock changed hands, 15 times the four-week average. The most-active contracts were April $24 calls, which quadrupled to 20 cents and accounted for more than two-thirds of call volume. This month’s options expire April 16.

The stock climbed as high as $23.33 in Nasdaq Stock Market composite trading. Shares rose 45 cents, or 2 percent, to close at $23.16. Mylan has a market capitalization of $7.1 billion,

“What we’ve heard is there’s chatter about a potential takeover, but that’s every day with some of these health-care companies,” said Les Funtleyder, a health-care analyst with Miller Tabak & Co. in New York, in a telephone interview today. “Because a couple companies have made a play for Ratiopharm and Teva won, the thinking is that Pfizer may be interested in another generic company because they were one of the bidders.”

Michael Laffin, a spokesman for Canonsburg, Pennsylvania- based Mylan, didn’t return calls and e-mails for comment. Pfizer spokeswoman Joan Campion said, “As a matter of practice, we don’t comment on market rumors or speculation.”

25 Acquisitions

Pfizer, the world’s largest drugmaker, has announced 25 acquisitions in the last five years with an average value of $4.89 billion including debt, according to Bloomberg data. Pfizer typically paid a premium of 79 percent above the average closing price of the target companies in the 20 days before the deals were announced, according to Bloomberg data.

Teva Pharmaceutical Industries Ltd. agreed on March 18 to buy Ratiopharm GmbH for 3.63 billion euros ($5 billion), ending a nine-month battle for Germany’s second-biggest maker of generic medicines.

Petah Tikva, Israel-based Teva beat Pfizer and Actavis Group hf, which also competed in the auction, according to people with knowledge of the situation who declined to be named before a deal was announced.

To contact the reporters on this story: Pat Wechsler in New York at pwechsler@bloomberg.net; Jeff Kearns in New York at jkearns3@bloomberg.net.

via bloomberg.com

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