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Why Akorn, Inc. (AKRX) Shares Rallied on Monday

After surging sharply on Friday, Akorn, Inc. (NASDAQ:AKRX) has rallied again on Monday, this time by 6.18% after the company confirmed that it is currently in discussions with a subsidiary of Fresenius SE about a potential acquisition of Akorn. The news confirms a Bloomberg report on Friday that said Fresenius SE ‘is weighing a bid’ to buy Akorn. German Fresenius SE, the largest publicly listed health-care provider in Europe, is in acquisition-expansion mode after having bought Spanish health provider Salud Holding SLU for around $6.11 billion last year.

In terms of potential deal price, analysts are divided. On one hand, Chris Cooper of Jefferies thinks a valuation of 4.5x-5x sales could net $36-$40 per share if Fresenius made a bid. William Blair is more optimistic, suggesting a potential buyout of $36-$48 per share.  On the other hand, Randall Stanicky of RBC Capital thinks shares already reflect around full-take over value.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

29 elite funds were long Akorn, Inc. (NASDAQ:AKRX) at the end of December, up one fund from the previous quarter.

The Bottom Line

Akorn, Inc. (NASDAQ:AKRX) shares have rallied again due to the company confirming that it is in talks about a potential sale to Fresenius. For more reading, check out ‘11 Most Sold Non Prescription Drugs‘.

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