Alere (NYSE:ALR) said it is confident it’s potential $6 billion merger with Abbott (NYSE:ABT) will go through, despite concerns that it could fall through.
“In response to the statements made by an Abbott spokesman yesterday, while Abbott is free to express concerns about anything it wants, it should not imply that Abbott has any basis to avoid closing the merger, as there is absolutely no basis whatsoever for Abbott to do so,” an Alere spokesperson said in a statement, according to Bloomberg.
Alere’s statement came in response to a comment from Abbott spokesperson Scott Stoffel after Alere posted its full year 2015 results earlier on Monday. Stoffel said that the filing “does not eliminate Abbott’s concerns about its business controls and practices, given the litany of issues that have come to light since our agreement was announced.”
“Alere has also failed to provide an adequate explanation for the extended filing delay and has refused to provide detailed and relevant information on several outstanding issues,” Stoffel told Bloomberg.
The merger has faced a number of speed bumps along the way, including a rejected $50 million offer from Abbott to spike the merger and a securities fraud lawsuit accusing Alere of artificially inflating its share price ahead of announcing the merger.
On Monday, Alere saw shares tick up after the diagnostics giant reported its long-delayed financial results ahead of its $6 billion merger.
Alere, which last month cut its outlook for the rest of the year amid a probe of accounting snafus in Africa and China, said in a press release that it found “immaterial errors” in its revenue recognition processes but revealed in a regulatory filing that there were “material weaknesses” in the way it recognized revenues and accounted for income taxes.
The Waltham, Mass.-based diagnostics giant reported a swing to full-year profits despite putting up red ink for the 4th quarter. Alere posted losses of -$21.4 million, or -28¢ per share, on sales of $623.3 million for the 3 months ended Dec. 31, 2015, for a top-line slide of -6.6% compared with Q4 2014.
Full-year profits were $185.1 million, or $2.17 per share, on sales of $2.46 billion, for a top-line slide of -10.7%. Alere missed its own sales target as well as Wall Street’s consensus forecast, but investors still sent ALR shares up 3.3% to $38.70 apiece in trading the day after posting.
Alere has said that its probe of hundreds of contracts and thousands of revenue transactions showed that it “incorrectly recorded the timing of recognition of certain revenue transactions” in 2013, 2014 and the 1st 3 quarter of 2015. The accounting problems, plus a U.S. Justice Dept. subpoena over its dealings with 3rd-party distributors and healthcare officials in Africa, Asia and Latin America, prompted Abbott to audit Alere’s books ahead of the consummation of their $56-per-share merger.
