Shares of Omnicell (OMCL) - Get Report jumped Wednesday following a report that said the medication-management-software vendor received a takeover approach from medical-supplies giant Baxter International (BAX) - Get Report at more than $120 a share.
Baxter approached Omnicell with an offer to acquire the company for more than $5 billion, sources told Reuters.
There is no certainty that Omnicell, Mountain View, Calif., will engage in discussions or that a deal will be reached, Reuters reported.
Omnicell shares at last check rose 8.3% to $119. Shares of Baxter International, Deerfield, Ill., rose 1.4% to $78.90.
Baxter shares are down about 5% year to date while Omnicell shares are up more than 40% in 2020.
In the wake of the report, Benchmark lifted its price target for Omnicell to $125 from $100.
Cantor Fitzgerald also published a note saying that adding Omnicell would be an "upgrade to Baxter's current portfolio."
Additionally, Becton Dickinson (BDX) - Get Report, one of Baxter's rivals, owns Pyxis, which is Omnicell's only primary competitor, according to Cantor Fitzgerald analyst Steven Halper. Becton Dickinson shares were little changed at $239.53.
"Baxter could easily acquire Omnicell given its financial position," Halper said. But he also says a takeover approach hasn't yet been confirmed.
Omnicell provides a range of services that help hospitals and health-care companies handle their prescriptions. Baxter provides health-care products, including artificial kidneys and insulin, for use in hospitals.
The medical-device market has been hot in recent weeks. Medical-imaging provider Butterfly Network said it planned to go public through a merger with Longview Acquisition, LGVW a special-purpose-acquisition company.