Alere Says It Rejected Abbott Offer to Terminate Merger Deal
April 29 2016 - 2:00AM
Dow Jones News
Alere Inc., which is grappling with foreign corruption probes,
said it recently rejected an offer of up to $50 million by Abbott
Laboratories to terminate their $5.8 billion merger agreement.
An Abbott representative was unavailable for immediate
comment.
Abbott agreed in February to buy the health-care diagnostics
company. Since then, Alere disclosed it has received a subpoena
regarding a foreign corruption investigation over payments in
Africa, Asia and Latin America. The company also has missed a
deadline to file its 2015 annual report with regulators because it
is analyzing its revenue recognition in Africa and China over the
past three years.
Alere said Thursday that in recent discussions between the two
companies, Abbott expressed concerns about the accuracy of the
covenants made by Alere in their merger agreement. Abbott also has
requested information from Alere about the governmental
investigations, citing rights under the merger agreement, Alere
said.
As part of those discussions, Alere said, Abbott offered to pay
between $30 million and $50 million, in respect of Alere's
transaction expenses, to terminate the merger agreement. Alere said
its board rejected that request.
Earlier Thursday, Abbott unveiled an agreement to acquire St.
Jude Medical Inc. in a cash-and-stock deal valued at $25 billion
that would create one of the leading makers of heart-related
devices. As part of that announcement, Abbott discussed plans to
issue $3 billion of stock as part of a plan to finance both
deals.
Last week, Abbott Chief Executive Miles D. White had declined to
affirm his commitment to the Alere deal, prompting speculation
about the deal's future.
Alere also said Thursday that it had received the requisite
lender approval for an extension to file its annual report. The
company said it hopes to conclude its accounting review and file
its annual report as soon as practicable, followed by its
first-quarter results.
Write to George Stahl at george.stahl@wsj.com
(END) Dow Jones Newswires
April 29, 2016 01:45 ET (05:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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