Back in ICU Medical

I nibbled back with a small position in ICU Medical, Inc. (Ticker: ICUI) yesterday at $68.51. The stock rose a bit on news that the company cancelled a conference presentation. Company says it was a scheduling conflict, but regardless something is starting to happen. It’ll be awhile before this one plays out so just have to be patient.

Warner Chilcott + Actavis = Great Deal

That was quick… Actavis (Ticker: ACT) will acquire Warner Chilcott (Ticker: WCRX) in a stock deal in which each share of Warner Chilcott will receive 0.16 shares of Actavis. I was expecting a cash component, but I actually like this stock for stock deal. The benefits for the combined company will be tremendous. You’re looking at a minimum of 30% accretion to earnings in 2014 and additional cost savings in 2015. I’m planning to hold onto my Warner Chilcott shares through this deal and beyond. This is one of those deals that actually makes sense and will create shareholder value.

Edit: I had some more time to digest this deal and decided to sell my position in Warner Chilcott at $19.69 generating a net gain of 2.93% over an 8 day period (131.73% annualized return). The scenario I fear most is that someone makes a move for Actavis and I’ll be over for Warner Chilcott. A safer play would be to go long in Actavis, which I may do.

Update: ICU Medical, Warner Chilcott and Zhongpin

I sold my position in ICU Medical (Ticker: ICUI) today at $67.63 generating a net gain of 0.54% over a 5 day period. This one is still in the very early stages and will take a while to materialize. I’ll continue to keep a close eye on it.

I’ve been making a few $ trading in and out of Warner Chilcott (Ticker: WCRX). I’m holding onto the shares I purchased yesterday at an average cost of $19.13 and plan on holding through the buy out process. I believe there will be a deal between Warner Chilcott and Actavis (Ticker: ACT). This will be a great combination and the market clearly agrees. I’m looking for something in the mid 20’s for Warner Chilcott.

Also, I’m back in Zhongpin (Ticker: HOGS) today at $12.94 (buyout price is $13.50). It looks like this deal will be completed in Q3 instead of Q2 based in the recent filing. I’m factoring in an end of July closing.

ICU Medical and Warner Chilcott Trades

I initiated a small position in ICU Medical, Inc. (Ticker: ICUI) today at $67.22. Bloomberg has reported that the company has hired JP Morgan to evaluate a potential sale. Analysts have mentioned a buyout price of $80 plus, which I tend to agree is a reasonable price. I believe there’s a good chance that a deal materializes. This company will appeal to both strategic and PE buyers. It’s going to take some time, but I’m comfortable with a small position for now.

It was a wild day with Warner Chilcott, PLC (Ticker: WCRX). Bloomberg reported this morning that Warner Chilcott was in talks to be acquired by Actavis (Ticker: ACT), Inc. I took a stab at Warner Chilcott at $17.68 and got out at $18.67 generating a 5.52% gain. This one was just too speculative to hold on right now. Warner Chilcott has been shopped around extensively in the past and could not find a buyer. If a deal does not materialize with Actavis, it’s over and out for Warner Chilcott. I’ll definitely be keeping a close eye on this one.

Sold Zhongpin, Inc

I sold my position in Zhongpin, Inc. (Ticker: HOGS) today at $12.95 generating a net gain of 0.72% over a 15 day period (17.28% annualized). I’m just reducing my risk just a bit. You tend to see a lot of volatility as you head into the final stretch for many of these China management buy out plays. This one will probably be completed sometime in June at a takeout price of $13.50. I was initially thinking this could be completed in May, but still waiting for the SEC to approve the proxy statement.

Here I Come Again... BMC Software

I’m back…. in BMC Software (Ticker: BMC) that is... My average cost is currently $45.60. I’m starting to feel more confident that a deal will materialize. Bloomberg recently reported that a PE group bid $48 for the company and yesterday Reuters reported that the PE groups offered $45 - $50 with Bain Capital / Golden Gate Capital taking the lead. I’m looking for a price $48 to $50 with a good chance that $50 gets this deal done. We’ll likely hear something over the weekend. It’ll be hard for the board to say no when there are compelling offers in the high 4’s plus on the table.

Out of BMC Once Again

I sold my position in BMC Software, Inc. (Ticker: BMC) today at $45.62 generating a net gain of 0.42% over a 2 day period. I was just reviewing my risk once again. The potential 5% gain from here (assuming a buyout price of $48) just wasn’t worth it. It’s a relatively small position so the potential gain would not have had a big impact on my performance. I made a little bit on BMC and now I’ll move on…