Carl Icahn Could Be Priming Hologic For Takeover Bid

Carl IcahnImage source: CNBC Video Screenshot

Last week Hologic, Inc. (NASDAQ:HOLX) adopted a poison pill after discovering that activist investor Carl Icahn had taken a sizeable stake in the company and reported plans to push for change. Now it sounds like he may be aiming to turn the medical tool maker into a prime candidate for a turnover.

Hologic tries to thwart Icahn’s efforts

Icahn said last week that he held a 12.6% stake in Hologic, Inc. (NASDAQ:HOLX) and that he intended to speak with management about a possible board seat and ways to boost the company’s shares. Today Bloomberg‘s Brooke Sutherland reports that his probable goal is a sale of the company, which is currently worth approximately $6 billion.

Analysts suggest that possible bidders for the company could include Siemens AG (SIE) or Danaher Corporation (NYSE:DHR). They also suggest strategic bidders and private-equity firms may be interested in buying the company.

Chances of a Hologic sale said to be very likely

At least one analysts assigns a 100% probability to Hologic, Inc. (NASDAQ:HOLX) being sold off to someone. International Strategy and Investment Group analysts say they expect the company to be sold off all or in parts.

Bloomberg data indicates that the company does trade at a lower profit multiple than 88% of peers in the U.S. Analysts at William Blair told Bloomberg that the company could draw in buyers for each of its units while Carl Icahn accelerates divestures during the review progress.

Hologic “screaming for an activist”

Cantor Fitzgerald analyst Jeremy Feffer told Bloomberg that Hologic is “a stock that has been screaming for an activist for some time.” He also notes that the size of Icahn’s position is important because it indicates that he is serious about what he wants. Feffer believes Icahn could be just what the doctor ordered to light a fire under the company’s board and push for changes which are far more dramatic than what they may have been thinking before.

Possibilities for Hologic

According to Bloomberg, Hologic, Inc. (NASDAQ:HOLX) now has four business divisions: diagnostics, breast health, gynecological surgical and skeletal health. This month the medical tool make posted its fifth loss in six years, and it has been conducting a strategic review to look for ways to get more out of the resources it has.

The company expects to see sales decline in fiscal 2014, which ends next September. It predicts that demand for its pap tests, NovaSure products and blood screening products will be weaker. Also Hologic management has been under fire for allegedly paying too much for Gen-Probe Inc., a company it bought out last year.

Shares of Hologic, Inc. (NASDAQ:HOLX) declined less than 1% in afternoon trading.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

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