Covidien to Buy Somanetics Corp for $299 Million (COV)

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Healthcare products maker Covidien plc ( COV ) said Wednesday that it would buy medical device maker Somanetics Corp in a cash deal worth about $298.7 million.

The $25-per-share purchase price represents a 32% premium over Somanetics' Tuesday closing price of $18.90. The deal is expected to be completed by the end of July.

Covidien said that Somanetics' non-invasive patient monitor that measures blood oxygen levels was a main reason for the acquisition.

Covidien shares were mostly flat in premarket trading Wednesday.

The Bottom Line
We had removed shares of COV from our recommended list back on October 6, 2008, when the stock was trading at $52.19. The company has a 1.73% dividend yield, based on last night's closing stock price of $41.71. The stock has technical support in the $38-$40 price area. If the shares can firm up, we see overhead resistance around the $44-$46 price levels. We would remain on the sidelines for now.

Covidien plc ( COV ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: COV

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