With Given Imaging nearly sold, activist investor Discovery Group has cashed out

Given Imaging's PillCam
--Courtesy of Given Imaging

Earlier this fall, Given Imaging ($GIVN) faced down restive shareholder Discovery Group, which urged the Israeli maker of the PillCam endoscopic camera to explore a sale, predicting it could fetch $26 to $30 per share. Now that Covidien ($COV) will snatch up the company for $860 million--at the high end of the sought-after price--the activist investor has decided to move on.

The Israeli business newspaper Globes reports that Discovery Group has completely cashed out of Given Imaging and sold off its entire 3.7% stake. That's 1.2 million shares, which the firm initially snatched up in early 2011 when the share price hovered around $11 to $16, the article noted. Globes said that Discovery appeared to have sold its stake on Dec. 9, the day after the sale was announced, and raked in between $30 million and $35 million.

Covidien's deal to buy Given represents a 26.8% premium over Given's Dec. 6 close, and the stock price shot up in tandem. It's hovered around the $30 mark in the week since, closing at $29.92 on Dec. 12.

Back in October, Discovery partner Mark Buckley wrote management a letter urging Given to consider a sale, arguing that its share price had suffered because of a poorly executed business strategy and missed business opportunities for PillCam devices. Given itself went so far as to consider selling itself in 2012 but backed away from that process in January 2013.

It's not as though Given hasn't succeeded. The company has enjoyed soaring revenue and net income all year, buoyed by new PillCam approvals in the U.S. and Japan. In 2012, Given also snatched up SmartPill, which makes an ingestible device that measures pressure, pH and temperature as it moves through the gastrointestinal tract. PillCam gives GI doctors a detailed view of the gastrointestinal tract as it's swallowed and moves through the body.

- read the Globes story

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