Alere (ALR) Stock Plummets, Rejects Abbott's Request to End Merger

NEW YORK (TheStreet) -- Alere  (ALR) stock is lower by 11.86% to $38.34 on heavy trading volume this afternoon, after the company rejected Abbott Laboratories's (ABT) attempt to end its $5.8 billion pending acquisition of the company. 

Both companies are working to fulfill their obligations under the merger agreement, Alere said in a statement. 

Abbott is concerned about the accuracy of Alere's financial statements, as the medical test maker has failed to file an annual report with U.S. securities regulators. 

Alere has also been subpoenaed by the Department of Justice regarding sales practices and dealings in Africa, Asia and Latin America, according to Bloomberg.

Abbott offered to pay Alere between $30 million and $50 billion to cancel the transaction, according to a statement by Alere. Alere's board "promptly rejected that request."

Additionally, Abbott yesterday announced that it intends to purchase medical device-maker St. Jude Medical (STJ) in a deal valued at $25 billion. 

About 5.5 million shares of Alere have been traded so far today, well above the company's average trading volume of roughly 1.7 million shares per day. 

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.

Alere's strengths such as its compelling growth in net income, good cash flow from operations and expanding profit margins are countered by weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.

You can view the full analysis from the report here: ALR

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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