Endo Health Solutions ($ENDP) has been mired in investor malaise over the past year, stemming from a $2.9 billion acquisition of American Medical Systems that never paid off. Now shareholders are pleading for a sale, and analysts say device giant Covidien ($COV) could be a perfect suitor.
As a Stifel Financial analyst told Bloomberg, Covidien has the capacity to commercialize the urology devices Endo picked up from AMS, and, while Covidien prepares to spin out its Mallinckrodt drug business this year, adding Endo's stable of generics and pain treatments could significantly boost the unit's share price once it goes public.
That's if Endo gets sold en masse, of course. Some figure the company will auction off its units, seeking a device buyer for its urology business and courting another drugmaker, such as Teva Pharmaceutical ($TEVA), to buy out its generics.
As expected, no one from Endo, Covidien, Teva or any other rumored buyer is commenting on the matter. But Fidelity, the company's largest shareholder, reportedly pushed hard for the ouster of former CEO David Holveck, and now that he's announced an impending retirement, the financial group is said to be pressing for a deal, making it all the more likely that something gets done this year.
- read the Bloomberg story