The premium will be stock after earnings. 180 +60 = 240, That's 80x 2015 earnings. Don't expect higher. The stock closed at 220 today. The fact 8 million shares were bought at this level shows we will go higher but a tad more. It will be a stock deal so the arbs can make money(what would a buyout be without the schnitzlers?), but the buyers stock will drop on the news so a 240 buyout stock will only go to about 235 until SEC approval.
JNJ Is manufacturing their stuff. It wont make sense for Novartis to buy since I would think JNJ has a buyout clause preventing this without first rights of refusal.
$18 billion is around 242. But they (whoever they are) pay a tad less before the announcement.
Paying 220-230 is serious money since its so close to the probable buyout price.
I think the only people who should be buying here is the eventual buyout company. I'm just selling puts (as I wrote a few days ago) but still making good money.
It still earned $7 a share in 2014 so stock is selling at PE of 12. Company willl easily buy back 8% of shares this year and we may have seen a floor at 80 if this is a climax bottom. Sure the strong the dollar will hurt 2015 earnings but stock is now 83 instead of 117 last November. Still expecting a Christmas rally so a 10 month hold should give a nice return.
This is pretty strong buying going on since oil bottomed at 43. Maybe Soros is buying. He may have gone short in 2nd half of 2014 to hedge position. If he thinks oil had bottomed and won't go under 45 I can see him
increasing his exposure here.
No merger expected. The buying was strong this week but not super strong on Friday. If company was going to be bought out Monday we would have had a 10 million share day Friday.
Earnings for 2014 have already been calculated. Those in the know aren't selling off stock otherwise stock would be in the 20s by now. Even stocks hurt by strong dollar aren't selling off. Shorts can't count on earnings to move stock down..
Once this stock had the bearish hammer candlestick in the 170s they all came in to short this and will attempt to close gap up after earnings.
Oh sure it hasn't been announced. But someone always gets tipped off and what would they do? Buy CCJ of course. Just speculation. but they will be restarted sometime and someone will know before the general public.