Tags: Omnicare | failed | takeover | OCR

Omnicare Sees Growth, Despite Failed Takeover

By    |   Wednesday, 04 April 2012 10:23 AM

Omnicare (OCR), a leading institutional pharmacy serving long-term healthcare facilities, is set for "solid growth" despite the expiration of its hostile bid to acquire its main rival, its managers say. The Covington, Ky., company expects to keep expanding despite its failed attempt to acquire its biggest competitor, an institutional pharmacy in Louisville, Ky., PharMerica (PMC).

Omnicare recently allowed its cash tender offer to acquire PharMerica for $15 per share to expire following the Federal Trade Commission's decision to block the proposed takeover on antitrust grounds.

Both Onmicare and PharMerica are large institutional pharmacies selling to nursing homes, assisted living centers, hospitals and other types of long-term healthcare facilities in more than 40 states.

Omnicare said in a statement that "certain conditions to the offer had not been satisfied and Omnicare had not waived those conditions" when the tender offer expired Feb. 17.

Omnicare also said its "business is performing extremely well and is poised for solid growth in 2012 and beyond."

Gregory S. Weishar, chief executive officer of PharMerica, said in a prepared statement that his company is "pleased with Omnicare's decision to allow its tender offer to expire" because it "substantially undervalued PharMerica and was illusory due to the significant antitrust concerns."

Wall Street generally feels good about owning Omnicare anyway, even if it doesn't own PharMerica. Half of the analysts following Omnicare have hold ratings on the stock and half recommend buying it.

Two analysts at Moody's Investors Service reported Jan. 30 that Omnicare's credit ratings were unchanged despite the Federal Trade Commission's decision to file an administrative complaint against the company, blocking its bid to take over PharMerica.

Moody's analysts Diana Lee and Peter H. Abdill said in their research note said that the regulatory denial of Omnicare's takeover bid "has no immediate effect on the company's Ba3 corporate family rating and other ratings, which remain under review for possible downgrade."


Omnicare posted full-year net sales of $6.18 billion, up from $6.03 billion the year before. GAAP income from continuing operations was $1.41, compared to 13 cents prior.

Omnicare next reports on May 24.

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Wednesday, 04 April 2012 10:23 AM
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