Mylan Stock Options Surge on Market Speculation of Pfizer Buyout Offer

Mylan Inc. climbed to the highest intraday level in four years and trading of bullish options surged the most since July on speculation that the biggest U.S. maker of generic drugs may be acquired by Pfizer Inc.

The stock rose 1.7 percent to $23.10 at 11:56 a.m. in Nasdaq Stock Market composite trading, and earlier reached $23.33. More than 20,000 calls to buy the stock changed hands, nine times the four-week average. The most-active contracts were April $24 calls, which jumped fivefold to 25 cents for the biggest gain among all Mylan options. This month's options expire April 16. Mylan hasn't closed above $24 for more than three years.

"What we've heard is there's chatter about a potential takeover, but that's every day with some of these health-care companies," said Les Funtleyder, a health-care analyst with Miller Tabak & Co. in New York, in a telephone interview today. "Because a couple companies have made a play for Ratiopharm and Teva won, the thinking is that Pfizer may be interested in another generic company because they were one of the bidders."

Michael Laffin, a spokesman for Canonsburg, Pennsylvania- based Mylan, didn't immediately return a call for comment. Pfizer spokeswoman Joan Campion said "As a matter of practice, we don't comment on market rumors or speculation."

Pfizer, the world's largest drugmaker, has announced 25 acquisitions in the last five years with an average value of $4.89 billion including debt, according to Bloomberg data. Pfizer typically paid a premium of 79 percent above the average closing price of the target companies in the 20 days before the deals were announced, according to Bloomberg data.

Teva Pharmaceutical Industries Ltd. agreed on March 18 to buy Ratiopharm GmbH for 3.63 billion euros ($5 billion), ending a nine-month battle for Germany's second-biggest maker of generic medicines.

Petah Tikva, Israel-based Teva beat Pfizer and Actavis Group hf, which also competed in the auction, according to people with knowledge of the situation who declined to be named before a deal was announced.

To contact the reporters on this story: Pat Wechsler in New York at pwechsler@bloomberg.net; Jeff Kearns in New York at jkearns3@bloomberg.net.

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