Alere says it rejected Abbott's request to end acquisition

Alere Inc. said it rejected Abbott Laboratories' request to terminate its $5.8 billion pending acquisition of the medical test maker, and that both companies are working toward fulfilling their obligations as part of the deal announced in February.

Abbott said it had "serious concerns" about the accuracy of financial information provided by Alere as part of the merger agreement, Alere said Friday in a statement, without specifying when the issue was raised. Abbott told Alere that its concerns related to the company's failure to file an annual report with U.S. securities regulators. Abbott Thursday announced its intent to purchase device-maker St. Jude Medical Inc. for $25 billion.

Abbott's agreement to buy Alere was announced on Feb. 1, without a specific closing date. Alere subsequently said it would delay filing its 10-K report with U.S. securities regulators and said in March that it had been subpoenaed by the Department of Justice over sales practices and dealings in Africa, Asia and Latin America.

"Abbott is awaiting access to the information it has requested from Alere relating to delays in filing its form 10-K and the circumstances surrounding the criminal grand jury subpoena alleging violations of the Foreign Corrupt Practices Act," Abbott said Friday in an emailed statement.

Abbott offered to pay Alere $30 million to $50 million, depending on Alere's expenses related to the transaction, to cancel the acquisition agreement, Alere's statement said. Alere's board "promptly rejected that request," according to the statement. Abbott subsequently affirmed its commitment to abide by its obligations, Alere said.

Nothing within Alere's review of its accounting, which will correct issues going back to 2013, or the Justice Department investigation constitutes a breach of the merger agreement, according to a note to investors from Dane Leone, an analyst at BTIG, Thursday, relating comments from Alere Chief Financial Officer Jim Hinrichs. Abbott affirmed its commitment to the current terms of the deal in the most recent meeting between the two sides, Leone said in the note detailing his conversation with Hinrichs.

Alere plunged 10.3 percent to $39.03 at 9:58 a.m. in New York after closing last night at $43.50. The stock has fallen 20 percent since the acquisition was announced, through Thursday. Abbott fell 1.8 percent to $39.68.

Last week, Abbott Chief Executive Officer Miles White demurred to answer on whether he was still committed to going through with the Alere transaction, raising questions about his company's intent to complete the acquisition. He declined to comment further Thursday when speaking with analysts on a conference call, saying it would be inappropriate.

"Alere is working through its issues," White said during an interview on CNBC. "It's not appropriate for me to comment on that while they are working through their issues."

Abbott said Thursday in a statement that it can finance the acquisitions of both St. Jude and Alere simultaneously. Alere also "affirmed its commitment to abide by its obligations under the merger agreement."

Alere said it has obtained approval from its lenders for an extension to file its 2015 annual report. It is working with independent auditors to file the 10-K with the U.S. Securities and Exchange Commission as soon as possible. A proxy statement needed to approve the acquisition by Abbott and its first quarter financial results for 2016 will be filed shortly after the annual report, Waltham, Massachusetts-based Alere said.

Alere is "completely confident that there is no basis for a termination of the merger agreement and that the merger will be consummated in accordance with its terms," according to the company's statement.