matria health nasdaqmatr actionable

Matria Health (NASDAQ:MATR): Actionable Call Alert!

- Broadpoint is out with a very interesting call on Matria Health

(NASDAQ:MATR) raising their tgt to $39 from $30, following the

announcement that Inverness Medical Innovations has agreed to acquire

Matria. Inefficiencies exist; even with IMA common down ~8% Monday,

they value IMA's bid at $36-$37 per MATR share. Firm expects a

correction, an increase in the cash component, or the reemergence of

other bidders. Either way, MATR shares are worth more.

All things being equal, the firm would expect an 8% decline in the

value of IMA common to reflect, at most, a like decline in the Series

B convertible preferred - from $400 (par) to ~$368. Keeping the number

of units (0.08125) per MATR share equal yields a ~$30 value for the

stock portion of the deal. Adding the $6.50 cash component results in

a total bid value in the area of $36.00-$37.00, well above yesterday's

close.

They doubt MATR holders will approve a deal at $31. IMA may have to

substitute cash for the preferred (no easy task given current B/S), or

other bidders may reemerge. Either way, MATR shares are likely to

trade higher.

Notablecalls: Glenn Garmont from Broadpoint is making a name for

himself with this call. No doubt about that. Word on the Street is