Alere jumps on Abbott Laboratories’ deal; Ctrip.com 1.25% bond expands; SanDisk edges up

By Rebecca Melvin

New York, Feb. 1 – Alere Inc. was the name of the day in convertibles on Monday after news that Abbott Laboratories said it would buy the Waltham, Mass.-based diagnostics and services company for $56.00 per share in cash, or about $5.8 billion, representing a 51% premium over Alere’s closing share price on Friday.

Alere’s convertible bonds jumped outright and on a dollar-neutral, or hedged, basis in active trade. Meanwhile, market players pored through the documents related to Alere’s convertible preferred, which seemed to have language that gave traders pause regarding what would happen to the preferreds in the event of the takeover.

“There was a little confusion in the documentation on that and people are doing their work on it,” a New York-based trader said.

Ctrip.com International Ltd.’s 1.25% convertibles due 2018, or the B tranche, gained more than 0.5 point on an outright basis and expanded on swap on Monday following a weekend Barron’s article that said the prospects for China’s No. 1 online travel company are positive following its merger with rival Qunar.

Elsewhere, SanDisk Corp.’s convertibles were edging a bit higher again along with the underlying shares amid expectations that the tie up with Western Digital Corp. will occur as planned.

The SanDisk 1.5% convertibles traded at 151.25 on Monday, which was up from about 150 on Friday.

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