Morning Commentary: Mylan, Teva move up in line on merger deal news; Intel slips

By Rebecca Melvin

New York, April 21 – Both Mylan NV’s and Teva Pharmaceutical Industries Ltd.’s convertibles traded up on an outright basis but were in line on a dollar-neutral basis on Tuesday morning on the heels of Teva’s offer to buy its smaller rival for $82.00 per share, a 23% premium to the company’s previous share price, or about $40 billion in cash and stock.

Both bonds are parity or less parity names, so the deal wasn’t overly significant to the convertibles market, a New York-based trader said.

“The deal was rumored in the market before, and they actually did it, and there’s really nothing to do from a hedged perspective,” the trader said.

The Mylan 3.75% convertibles due in September traded up to 552, which was up on an outright basis by about 45 points.

Mylan shares were up about 9% at $74.19.

Teva’s 0.25% convertibles traded up about a point outright to 153.5, which was right around parity.

Shares of the Israel-based generic drugmaker were up $1.24, or 2%, to $64.53.

Elsewhere, the market was pretty quiet.

Intel Corp.’s two sister convertibles were mentioned in trade with shares of the chip giant down about 1%.

The Intel 2.95% convertibles were off about 0.125 point, a trader said.

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