Advanced Medical Optics (EYE) has offered to take over Bausch & Lomb (BOL) for a cool $4.1 billion. This offer brings into question the $3.7 billion Warburg Pincus deal currently on the table. Warburg Pincus is a private equity firm.
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An audio podcast of this article is available at: poweropt.com/podcasts/2007_07_05_BOL.mp3
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Bausch & Lomb may be a better fit for Advanced Medical Optics than with a private equity firm. AMO’s view seems to be a long-term desire to hold a market share in contact-lens products, laser eye surgery, cataract implants, diagnostic devices, and other eye related products and services. The proposal means AMO would pay $45 in cash and $30 in stock for to Bausch & Lomb shareholders. This is a significant increase over Warburg Pincus $65 all-cash offer. However, many skeptics feel antitrust issues may cause the deal to fail.
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Bausch & Lomb’s board has not yet commented on the offer. It has been speculated in news reports Goldman Sachs’s private-equity firm and Kohlberg Kravis Roberts may join AMO’s group of buyers. This would be fairly uncommon as private equity firms do not as a rule get into bidding wars. Experts in the private equity space are saying as the attractive investment landscape becomes more barren, these types of battles are likely to become more common. AMO’s customers include hospitals, surgeons, surgical centers, optometrists, and ophthalmologists. AMO has operations in the Americas, Europe, Africa, the Middle East, and Asia. AMO was founded as a spinoff of Allergan in 2002 and it is currently the market leader in vision-correction surgery. This year AMO also completed an acquisition of IntraLase. IntraLase is laser manufacturer whose technology has replaced traditional hand-held blades. The blades were used in eye surgery in the first step of laser-assisted in situ keratomileusis, or Lasik.Looking at this News from an Options Trading Perspective:
Once you have identified a stock you believe will move up (or down), you can then turn to the PowerOptions website to help you find the most potentially lucrative trades. In this example we will look at trades in the optometry space. If you would like to learn more about how PowerOptions can help you find option trades, call 877-992-7971 and speak to an options trading expert.
Also, there are a number of Advanced Option Trading Articles available on the PowerOptions website to teach investors how to make money in a myriad of trading situations. Or for something a little more basic, you may want to look at the article entitled, An Introduction to Options and Futures.
To go through the option chains currently offered on the companies listed below would take hours (or days). Below we show you how easy it is, with just a few clicks, for PowerOptions‘ tools to do the heavy lifting for you.
Potential Trades:
All of the following option trades have 44 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
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| Company Name |
Syb | Stock Price |
OPTION | Strike Info |
Opt Bid |
Net Cost |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
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| Bausch & Lomb Inc. | BOL | 72.00 (+3.36) | BOLHM | 07 AUG 65.0 (44) | 9.98 | 62.02 | 13.9 | 4.8 | 4.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alcon Inc. | ACL | 135.62 (+0.39) | ACLHG | 07 AUG 135.0 (44) | 5.6 | 130.02 | 4.1 | 3.8 | 3.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allergan Inc. | AGN | 57.45 (-0.58) | AGNHY | 07 AUG 57.5 (44) | 1.95 | 55.5 | 3.4 | 3.5 | 3.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| VISX Inc. | EYE | 35.89 (+0.42) | EYEHG | 07 AUG 35.0 (44) | 2 | 33.89 | 5.6 | 3.3 | 3.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BOL – The Bausch and Lomb trade involves the August $65 call option and offers 13.9% downside protection and 4.8% potential profit if the stock is above the $65 strike price at the end of the option period. The stock is currently trading at $72.00.
Competitors for BOL include: Alcon Inc. (ACL), CIBA Vision Corporation (private), Vistakon (private), Allergan Inc. (AGN), Cooper Companies Inc. (COO), VISX Inc. (EYE), IntraLase Corp. (ILSE), Inspire Pharma. Inc. (ISPH), OSI Pharmaceuticals Inc. (OSIP), QLT Inc. (QLTI), and Staar Surgical Co. (STAA).
ACL – The Alcon trade involves the August $135 call option and offers 4.1% downside protection and 3.8% potential profit if the stock is above the $135 strike price at the end of the option period. The stock is currently trading at $135.62.
Competitors for ACL include: Allergan Inc. (AGN), Bausch & Lomb Inc. (BOL), Novartis AG (NVS), VISX Inc. (EYE), and Staar Surgical Co. (STAA).
AGN – The Allergan trade involves the August $57.50 call option and offers 3.4% downside protection and 3.6% potential profit if the stock is above the $57.50 strike price at the end of the option period. The stock is currently trading at $57.45.
Competitors for AGN include: Bausch & Lomb Inc. (BOL), Johnson & Johnson (JNJ), CIBA Vision Corporation (private), Alcon Inc. (ACL), Isolagen Inc. (ILE), Inspire Pharma. Inc. (ISPH), and Medicis Pharmaceutical Corp. (MRX).
EYE – The AMO trade involves the August $35 call option and offers 5.6% downside protection and 3.3% potential profit if the stock is above the $35 strike price at the end of the option period. The stock is currently trading at $35.89.
Competitors for EYE include: Alcon Inc. (ACL), Bausch & Lomb Inc. (BOL), CIBA Vision Corporation (private), IntraLase Corp. (ILSE), and Staar Surgical Co. (STAA).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
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PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags] Warburg Pincus, Kohlberg Kravis Roberts, CIBA Vision Corporation, Vistakon, ACL, Alcon Inc., AGN, Allergan Inc., BOL, Bausch & Lomb Inc., COO, Cooper Companies Inc., EYE, VISX Inc., ILE, Isolagen Inc., ISPH, Inspire Pharma. Inc., JNJ, Johnson & Johnson, MRX, Medicis Pharmaceutical Corp., NVS, Novartis AG, OSIP, OSI Pharmaceuticals Inc., QLTI, QLT Inc., STAA, Staar Surgical Co., advanced option trading articles, an introduction to options and futures, covered call investment strategy, introduction to options, investment strategy, iron condor, options trading, poweroptions, stock option trading, stock options [/tags]