The deal spread in Globus Medical’s (NYSE:GMED) planned takeover of NuVasive (NASDAQ:NUVA) widened slightly even as NuVasive stuck with its guidance for the third quarter amid a second request from the Federal Trade Commission.
“Based on our progress with the response to the second request, we are not backing off that timing, and we are doing everything we can to make that happen,” NuVasive CEO Chris Barry said on the company’s Q2 earnings call on Wednesday. The deal spread widened to $3.40 from $3.42 on Wednesday.
NuvaSive (NUVA) disclosed that on May 3, it received a second request from the FTC in regards to its sale to Globus Medical (GMED). The NUVA/GMED spread widened to the highest since the deal was announced in February last week as some investors are concerned that the FTC could try to block the deal, especially after a report on July 20 that the regulator is evaluating a path toward a potential lawsuit.
“Given the recent M&A headlines, I’ve heard a lot of commentary about the FTC’s approach to deals generally, as well as speculation about what action the FTC will take in the new base of the Globus merger,” Barry said. “While there’s a range of potential outcomes when the FTC is reviewing our transaction, we remain optimistic on a Q3 close.”
Barry also said he doesn’t believe the deal is anti-competitive and that there are a lot of competitors in the space and a low barrier to entry.
NuVasive (NUVA) fell 3% on Thursday, while Globus Medical , which is scheduled to report Q2 results after the close, dropped 2.7%.
NuVasive/Globus Medical deal spread widens even as NUVA stands by deal close date
