The spotlight is back on the pharmacy fuss
James M. Berklan, McKnight's Editor
How else can one explain the supposed flap between Madonna (I guess we call her “Madge” now) and Sir Elton John? If you and I had their same “discussion,” the person with the royal title might get his mouth washed out with soap, but otherwise, we'd be largely ignored.
Expect some loud noise soon in the long-term care arena over Omnicare's hostile takeover bid of rival PharMerica. Inside word has it that by the end of this week, the Federal Trade Commission might quietly rule out the proposed $715 million deal.
If it goes ahead, however, the takeover would combine the Nos. 1 and 2 pharmacy providers in the country for skilled nursing and assisted living facilities. They combined for about $8 billion in revenue last year and could command as much as 60% of the market if merged, one analyst says.
It's a story that has simmered for nearly a half year after Omnicare, peeved that it was rejected twice in private, went public with a $15-per-share bid in August. Antitrust caution flags were raised immediately. Omnicare says it won't formally proceed with its offer until Jan. 26, unless the FTC ends its investigation sooner.
A report in the New York Post last week had “a source close to the situation” saying it appeared the deal would get a big thumbs-down from the Obama administration. That sent the stock values of both companies sliding, a testament to the power of a keyboard — if it's connected to a big enough media outlet.
PharMerica leaders said Tuesday they're simply keeping their eyes on the road, trying to conduct business as usual since the FTC and Omnicare aren't commenting to them. They say they really have no choice.
They're also dreaming of a purchase of at least $20-per-share — territory PharMerica hasn't seen since peaking there momentarily in mid-2008. If the Omnicare bid is ruled out of bounds, there's a chance another investment group might swoop in. But under that scenario, it's hard to believe a suitor would have to shell out anything near $20 per share.
Omnicare, meanwhile, is patiently standing by, licking its chops. It didn't get so big by chance. And it is used to getting what it wants.
Should things stretch to Jan. 26 with no blowback from the FTC — a highly unlikely scenario — get ready for the volume to rise again. In fact, you might want to look, er, listen for it by the end of the week.
Hostile takeover attempts can get pretty noisy, no matter who's involved.
