FMI-Roche partnership

I reviewed the following link: https://www.roche.com/media/store/releases/med-cor-2015-01-1…

The web page is from 1/12/15, which states that Roche was to purchase up to 56.3% of FMI at a cost of 250 million USD; the cost per share was $50 USD. This price per share was 109% premium over the closing price of FMI on 1/9/2015.

So with this in mind, if Roche were to acquire the remaining ownership of FMI, could we expect another 100%+ premium over the current price range of FMI?

Excellent question…and I have no idea the answer, but I did throw out some hypotheticals about a weeks ago in the linked post/thread.

http://discussion.fool.com/fmi-what-comes-next-32909631.aspx?sor…

A nice, round $100/share price would present about a 33% premium over $75/share (I see $74.30 as the intraday/52-week high so far).

It’s impossible to say the premium Roche will pay.

That said, FMI has a STRONG business model. FMI can measure over 300 cancer genes and has the largest database of clinical data which kind of snowballs. The nearest competitor can only identify 71 genes. Because they are tester of choice and they are approved by Medicare/Medicaid, they will get the most test requests. Because they get the most test requests, they get the most samples which will further grow the genes that they can identify in the future so FMI gets a beneficial loop going. AND since Medicare/Medicaid is approved, other insurance companies are likely to begin approving the test as well.

Who knows? The premium may be even larger. Even after the run up, I’d recommend dipping a toe in the stock. Odds are, it will work out well.

Best,

bulwnkl

4 Likes

Sold out at $69.00. Then saw the big drop. Felt quite smug, not so now. Should have listened to you.

bulwnkl and others,

Anyone looking at any other Calls/Strikes on FMI?

I realize the Jan 45’s have already run up a great deal.

Thanks for any input and thank you, bulwnkl, for bring us all FMI.

– This…is the MaineReason

MaineReason,

From my position, I have no clue about what timing of a buyout would be, but August is the furthest out expiration available. I went for the $75 August call on 1/3/18 on one of FMI’s dips.

http://discussion.fool.com/fmi-what-comes-next-32909631.aspx?sor…

-volfan84

Thanks very much volfan84.

Best of luck with your position.

– This…is the MaineReason