Alere agrees to cough up probe docs to Abbott

Alere (NYSE:ALR) shares rose yesterday after it agreed to give documents to Abbott (NYSE:ABT), which is hoping to rescind its $6 billion offer to acquire the diagnostics company, covering probes into Alere’s dealings with 3rd-party distributors and foreign healthcare officials.

The companies have sued each other in a Delaware state court, with Abbott seeking to compel Alere to produce the documents and Alere seeking to force the deal to close. This week Alere agreed to cough up the documents; the companies revealed the settlement Nov. 15 in a hearing at the Delaware Chancery Court, according to news reports.

“Abbott will be receiving the information it requested in its complaint,” Abbott spokesman Scott Stoffel told the Chicago Tribune. Alere said it agreed to comply in hopes of closing the deal as quickly as possible, the newspaper reported.

ALR shares closed up 5.7% at $38.21 apiece yesterday on the news.

The $5.8 billion deal, announced in February, soon ran into trouble. A March 11 subpoena from the U.S. Justice Dept. sought documents on Alere’s dealings with 3rd-party distributors and foreign healthcare officials and the company was late in filing its full-year results for 2015. Alere in April rejected a $50 million offer from Abbott to spike the merger; in July the DoJ initiated another probe into Alere’s billing practices for pain management payments from government insurance programs.

Alere sued Abbott the next month, looking to force its would-be acquirer to obtain all antitrust approvals required to complete the acquisition. In early September, Delaware Chancery Court Judge Sam Glasscock put the lawsuit on the fast track and urged the companies to try and talk things out; an attempt at mediation failed later that month.

Abbott filed its counter-suit earlier this month, the same day that the Centers for Medicaid & Medicare Services revoked enrollment for Alere’s Arriva diabetes division after finding that it submitted claims for 211 deceased patients.

Abbott is hoping to close another deal, the $25 billion acquisition of St. Jude Medical (NYSE:STJ), by the end of this year. Anti-trust regulators in the European Union are said to be close to approving the merger pending concessions from the companies. Alere alleges in its lawsuit against Abbott that its would-be acquirer got cold feet after inking the St. Jude deal in April.

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