Two research firms had different views on whether the proposed acquisition of Alere  (ALR) by Abbott Laboratories  (ABT - Get Report) will close after the health care products giant refused to comment on the issue during its earnings conference call yesterday. Canaccord is less confident that the deal will get done at the agreed upon price, while Jefferies still expects Abbott to complete the transaction and thinks that the deal could proceed as planned.

BACKGROUND: On February 1, drug maker Abbott agreed to buy Alere, which provides diagnostic services, for $56 per share. When Abbott was asked about the acquisition yesterday morning on its results conference call, however, the company refused to comment on the issue. Abbott management said it was inappropriate to comment on the deal since Alere was delinquent with their filings. Alere's stock sank 12% yesterday in the wake of Abbott's "no-comment."

ANALYST REACTION: Noting that Alere also refused to comment on the deal, Canaccord analyst Mark Massaro wrote that he is now "substantially less confident" that Abbott will actually buy Alere for $56 per share. Abbott has leverage over Alere, and "may be frustrated" by Alere's postponement of its 10-K filing, according to Massaro. Moreover, Abbott may be assessing any changes that Alere will have to make to its business due to subpoenas it has received relating to a Foreign Corrupt Practices Act probe, Massaro stated. Given all of these factors, Abbott could look to lower the takeover price, the analyst stated. He cut his price target on Alere to $46 from $56 and kept a Hold rating on the shares. More optimistic about Alere was Jefferies analyst Raj Denhoy. The issues facing Alere seem relatively "benign," Denhoy believes. However, given these issues, it makes sense for Abbott to "leave its options open," the analyst stated. Abbott wants to preserve its ability to respond to adverse news that could be revealed by Alere's restatements and by the probe of the company, the analyst indicated. If other companies are looking to buy Alere, Abbott "has less room" to seek to lower the acquisition price, Denhoy believes. However, if there were no other bidders for Alere, Abbott could look to acquire the company for a lower price, the analyst stated. He kept a $56 price target and Hold rating on Alere.

PRICE ACTION: In morning trading, Alere rose 0.6% to $43.62.

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