* Relational Investors reports 8.71 pct stake in co as of
* Says stock is undervalued
Nov 25 Activist investor Ralph Whitworth's
Relational Investors LLC fund announced a large stake in Par
Pharmaceutical Cos Inc and said the generic drugmaker's
management should consider strategic alternatives if the stock
continues its poor run.
The San Diego-based fund, which reported an 8.71 percent
stake in the company in a regulatory filing on Friday, said it
believed the stock will continue to be undervalued "because of
industry challenges and the company's sub-optimal size and
Woodcliff Lake, New Jersey-based Par Pharmaceutical's stock
has lost about a quarter of its value so far this year. The
shares closed at $29.01 on the New York Stock Exchange.
"The reporting persons (Relational Investors) are confident
that substantial cost savings could be achieved in a transaction
with a strategic buyer," the fund said in a filing with the U.S.
Securities and Exchange Commission.
Still, the fund expects Par Pharma's recent deals to buy
privately held generic drugmakers Anchen and Edict, along with
its acquisition of three generic products from Teva
Pharmaceuticals, to help the company generate
sustainable earnings growth beyond 2012.