ALLEGAN, MI – Shares of Perrigo Co. PLC were up more than 4 percent in midday and afternoon trading Tuesday on the New York Stock Exchange.
There was no clear indication of what caused the upward spike.
Shares closed at $159.94, up $6.63, or 4.32 percent, on trading volume of about more than 1.2 million shares. Perrigo's average daily trading volume has been about 914,000 shares.
Among things to consider, two industry observers say, are:
-As cold winter weather hits, interest is keen in a company that is one of the world's leading manufacturers and distributors of cough and cold medicines. Perrigo is the maker of over-the-counter and generic prescription pharmaceuticals and nutritional products sold under the labels of many major retailers.
-There has been some recent merger and acquisition activity. Pharmaceutical maker Actavis announced a $66 billion deal on Monday to buy Allergan, the pharmaceutical company that makes Botox. Shares of Allergan jumped more than 5 percent and shares of Activis gained 1.7 percent with the announcement.
-Perrigo was the focus of takeover talk this past summer. Company shares rose more than 9 percent in mid-July as investors reacted to an online report that Perrigo may have been looking for a buyer. The company declined to comment on what it described as market rumors.
Investors may also be piqued by Perrigo's plan to buy Omega Pharma NV, of Belgium. Perrigo announced on Nov. 6 that it has a definitive agreement to buy Omega Pharma for $4.5 billion deal (3.6 billion euros)
A big deal
The Omega Pharma deal is expected to broaden Perrigo's portfolio of over-the-counter drugs and expand its market presence in Europe. In announcing the deal, Joseph C. Papa, chairman, president and CEO of Perrigo, said, "The combination of these two great companies accelerates Perrigo's international growth strategy, substantially diversifies our business streams and establishes a durable leadership position in the European OTC marketplace."
Papa said the company believes the transaction will enhance shareholder value, saying ""Omega brings a leading OTC product portfolio, European capabilities, and a highly experienced management team to support Perrigo's continued growth."
Omega, which sells healthcare products, prescription-free medicines and personal care items, generated $1.6 billion in revenue during the 12 months ended Sept. 30. According to information provided by the company, that would make it the fifth largest player in the European over-the-counter pharmaceuticals market and the largest or second largest player in four European markets.
Perrigo will acquire Omega in a cash and equity transaction that includes the purchase of Omega's equity for $3.1 billion and the assumption of $1.4 billion in debt.
First-quarter earnings
On Nov. 6, Perrigo reported a drop in net earnings for the first quarter of its 2015 fiscal year, the period ended Sept. 27. It reported $96.3 million in net earnings, down from $111.4 million for the same period a year ago. On a per-share basis, it earned 72 cents per share, down $1.18 a share.
Adjusted to exclude one-time events and costs, first quarter net income increased 30 percent to $188 million or $1.40 per diluted share. That failed to meet expectations of analysts polled by Thomson Reuters, however. According to The Wall Street Journal, analysts anticipated $1.44 per share in earnings.
Perrigo reincorporated itself in Dublin, Ireland, last year as it acquired Irish Biotech Elan Pharmaceuticals. Perrigo's administrative headquarters remains in Allegan County where the majority of its 3,600-person Michigan workforce is employed.
Shares of Perrigo Co. are traded on the New York Stock Exchange under the ticker symbol PRGO.
Business writer Al Jones may be contacted at ajones5@mlive.com. Follow me on Twitter at ajones5_al.