<span id="midArticle_start"/><span id="midArticle_0"/> (Reuters) - Perrigo Co Plc's options attracted an unusually large bullish bet days ahead ofan offer from generic drugmaker Mylan NV to buy thecompany, options data shows.
<span id="midArticle_1"/>On Wednesday, Mylan said it made a proposal to acquirePerrigo for about $29 billion in cash and stock, sending theDublin, Ireland company's shares up by more than 30 percent toan all-time high of $215.73. Mylan shares rose as much as 16percent to a high of $69.45.
<span id="midArticle_2"/>Options activity has been known to spike before the publicannouncement of deals and the U.S. Securities and ExchangeCommission has in the past announced enforcement action foralleged insider trading involving options trading.
<span id="midArticle_3"/>On March 24, the volume in Perrigo's options, which onaverage trade less than 600 contracts a day, jumped to more than4,700 contracts, driven by a large options bet on Perrigo sharesrising sharply before mid-May.
<span id="midArticle_4"/>"They were positioning for an upside move and they had theireye on a catalyst. It could have been earnings or it could havebeen some kind of deal talk," said optionMonster.com leadanalyst David Russell.
<span id="midArticle_5"/>A trader appears to have bought 2,000 calls and sold thesame number of puts, for a net payout of about $400,000, saidFred Ruffy, options strategist at WhatsTrading.com.
<span id="midArticle_6"/>Calls convey the right to buy the stock at a certain pricein the future and puts impart the right to sell the stock at afixed price at a future date.
<span id="midArticle_7"/>The options were set to expire in May 15 and would capturePerrigo's third-quarter results on May 4.
<span id="midArticle_8"/>On Wednesday, the value of these calls jumped, at one pointto as much as $6.8 million, according to Thomson Reuters data.
<span id="midArticle_9"/>A spokeswoman for the Financial Industry RegulatoryAuthority, which oversees securities firms, declined to commenton the options activity. The U.S. Securities and ExchangeCommission did not immediately respond to a request for comment. (Reporting by Saqib Iqbal Ahmed; editing by Andrew Hay)
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<span id="midArticle_1"/>On Wednesday, Mylan said it made a proposal to acquirePerrigo for about $29 billion in cash and stock, sending theDublin, Ireland company's shares up by more than 30 percent toan all-time high of $215.73. Mylan shares rose as much as 16percent to a high of $69.45.
<span id="midArticle_2"/>Options activity has been known to spike before the publicannouncement of deals and the U.S. Securities and ExchangeCommission has in the past announced enforcement action foralleged insider trading involving options trading.
<span id="midArticle_3"/>On March 24, the volume in Perrigo's options, which onaverage trade less than 600 contracts a day, jumped to more than4,700 contracts, driven by a large options bet on Perrigo sharesrising sharply before mid-May.
<span id="midArticle_4"/>"They were positioning for an upside move and they had theireye on a catalyst. It could have been earnings or it could havebeen some kind of deal talk," said optionMonster.com leadanalyst David Russell.
<span id="midArticle_5"/>A trader appears to have bought 2,000 calls and sold thesame number of puts, for a net payout of about $400,000, saidFred Ruffy, options strategist at WhatsTrading.com.
<span id="midArticle_6"/>Calls convey the right to buy the stock at a certain pricein the future and puts impart the right to sell the stock at afixed price at a future date.
<span id="midArticle_7"/>The options were set to expire in May 15 and would capturePerrigo's third-quarter results on May 4.
<span id="midArticle_8"/>On Wednesday, the value of these calls jumped, at one pointto as much as $6.8 million, according to Thomson Reuters data.
<span id="midArticle_9"/>A spokeswoman for the Financial Industry RegulatoryAuthority, which oversees securities firms, declined to commenton the options activity. The U.S. Securities and ExchangeCommission did not immediately respond to a request for comment. (Reporting by Saqib Iqbal Ahmed; editing by Andrew Hay)
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