April 17, 2009 / 5:49 PM / 10 years ago

Omnicare shares rise on takeover talk: traders

PHILADELPHIA (Reuters) - Shares of Omnicare Inc OCR.N, which sells pharmaceuticals to nursing homes, rose more than 8 percent on Friday amid market speculation that it could be a takeover target, traders said.

Omnicare’s stock added $2.23, or 8.8 percent, to $27.61 in afternoon trading on the New York Stock Exchange.

Volume in Omnicare call options, which give buying rights to the stock, also was aggressive on Friday.

In afternoon trade, 8,600 Omnicare calls and 622 puts had changed hands, 19 times the usual combined daily volume, according to Trade Alert.

“Omnicare calls are active on unconfirmed takeover chatter,” said Paul Foster, options strategist at web information site theflyonthewall.com.

Trade Alert’s data showed that sentiment based on option order flow was 59 percent bullish, 23 percent neutral and 18 percent bearish.

“Earlier in the session, it looked like the May $25 and $30 OCR calls were being bought on talk Walgreens might bid for Omnicare,” said WhatsTrading options strategist Frederic Ruffy.

Omnicare could not be immediately reached for comment. Drug-store chain Walgreen Co WAG.N declined to comment.

Shares of Walgreen shed 34 cents, or 1.1 percent, to $30.05.

Reporting by Jessica Hall in Philadelphia, with additional reporting by Doris Frankel and Jessica Wohl in Chicago, and Ransdell Pierson in New York, editing by Gerald E. McCormick

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