Hill-Rom (HRC) - Get Hill-Rom Holdings, Inc. Report shares rose to a record high Wednesday, after the medical equipment maker reportedly rebuffed a $9.6 billion takeover offer from massive peer Baxter International (BAX) - Get Baxter International Inc. Report.
Such a share price move indicates market participants believe Hill-Rom will receive a higher bid.
Hill-Rom stock recently traded at $134.57, up 8.7% at last check, and earlier hit an all-time peak of $142.45. It has jumped 33% over the past six months on takeover speculation.
Baxter recently traded at $81.72, down 0.5%, and has firmed 5% over the last six months.
News of the rebuff came from Bloomberg, which cited knowledgeable sources.
Hill-Rom doesn’t think Baxter’s $144 per share offer is high enough, the sources said. They said Baxter may offer a higher price.
As for Baxter, Julie Utterback puts its fair value at $80 and assigns it a narrow moat.
“Following the spin-off of Baxalta in mid-2015, Baxter's new management team has focused on increasing efficiencies and innovating in medical products,” she wrote in a commentary. “That focus has resulted in much-improved profitability and cash flow generation.”
Further, “In the intermediate term, the company aims for roughly 5% organic sales growth,” she said.
That’s “primarily through new product launches and for double-digit adjusted earnings per share and free cash flow growth compounded annually. Acquisitions could add to those prospects.”
In other news Wednesday, TheStreet.com founder Jim Cramer discussed earnings from Apple AAPL, Alphabet GOOGL, Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report, Starbucks (SBUX) - Get Starbucks Corporation Report and Pfizer (PFE) - Get Pfizer Inc. Report on TheStreet Live.
He also analyzed what the CDC mask decision means for markets.