Alere shares sink after Abbott CEO fuels speculation deal at risk

(Reuters) – Abbott‘s (NYSE:ABT) chief executive said on Wednesday it would not be appropriate to comment on whether the company was committed to buying diagnostics company Alere (NYSE:ALR), fueling speculation the deal might not close.

Alere’s stock tumbled about 17% to $41 after Abbott Chief Executive Miles White, speaking on a post-earnings conference call, declined to respond directly when asked whether he would reaffirm Abbott’s commitment to the $5.8 billion deal.

Alere, which agreed to the deal in February, said in March it had received a grand jury subpoena from the U.S. Department of Justice seeking documents relating to its sales practices and would delay filing its annual report.

“We don’t know when they will file their proxy,” White said in response to a question from an analyst. “We don’t know when they are going to have a shareholder vote. So right now I’d say it’s not appropriate for me to comment on Alere.”

Buying Massachusetts-based Alere would allow Illinois-based Abbott to become the leader in point-of-care diagnostic testing.

Abbott still considers M&A to be a high priority but will be cautious about where it invests, taking into account exposure to potential foreign exchange volatility, White added.

 

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