Gen-Probe Shares Plunge As Sale Appears to Falter
Gen-Probe Shares Plunge As Sale Appears to Falter [North County Times, Escondido, Calif.]
From North County Times (Escondido, CA) (June 7, 2011)
June 06--SAN DIEGO -- Shares of Gen-Probe Inc. fell 13 percent Monday after the Wall Street Journal reported that a rumored sale of the biotech company was in trouble.
Gen-Probe closed Monday at $71.41 per share, down $10.35 for the day. The Journal wrote that the Swiss pharmaceutical giant Novartis AG was the only company still in the running to buy Gen-Probe, attributing the information to unnamed sources.
"Novartis, which has a partnership with Gen-Probe, was seen as keen on keeping Gen-Probe out of others' hands, people familiar with the matter said," the WSJ article stated. "But it may not be as motivated as a buyer if there is no competition, these people added."
Carlsbad-based Life Technologies Corp. was among those rumored to have been interested, according to the Journal article. Gen-Probe makes a variety of diagnostic products that analysts say could be a good fit with Life Tech.
Gen-Probe is one of the largest biotech companies in San Diego, with a market value of $3.4 billion even after the loss Monday. In April, shares jumped after Bloomberg News published a story saying the company had hired the investment banker Morgan Stanley to find a buyer. That story was also based on unnamed sources.
Gen-Probe has declined to comment on the sale rumor.
A purchase of Gen-Probe by a larger diagnostic company could yield cost savings, Lauren Migliore, an analyst for the Chicago-based research company Morningstar Inc. The savings would justify a higher valuation for the company, Migliore wrote in an April 28 report.
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Posted: June 2011