Morning Commentary: Allergan mandatory edges higher on deal talks; Rovi drops after missing estimates

By Rebecca Melvin

New York, Oct. 29 – U.S. convertibles players were trading and watching different situations on a big earnings day for the market on Thursday, as well as a deal on tap post-close from Integrated Device Technology Inc. and uncertainty stirred by a potential tie up between Allergan plc and Pfizer Inc., a New York-based trader said.

Allergan’s mandatories were up about 0.375 point on a swap basis at 104.5 versus an underlying share price of $310.00, a second trader said.

Elsewhere, Rovi Corp. shares plunged 20% after the Santa Clara, calif.-based software and internet media company reported a quarterly loss of $18.5 million.

Earnings adjusted for one-time items were 29 cents per share, which was short of expectations, and revenue also missed the mark.

“There were a few big moves after earnings,” the trader said, citing Rovi’s miss and that of Bunge Ltd.

For the full year, the outlook for Rovi remained intact. It expects earnings in the range of $1.35 to $1.60 per share with revenue between $500 million to $530 million.

Rovi shares fell 20% to $9.00. A price on Rovi’s 0.5% convertibles due 2020 wasn’t immediately available.

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