August 15, 2014 by Brad Perriello
Bearish options trades on Covidien are driven by speculation that Medtronic will follow Walgreen in abandoning plans for a so-called tax inversion deal, Bloomberg reports.
Medtronic (NYSE:MDT) might elect to alter the terms of its $43 billion offer to acquire Covidien (NYSE:COV) over concerns about the tax inversion aspect of the deal, Bloomberg reported today.
Citing the high price of bets on Covidien’s share price declining, the news service reported that investors worry that Medtronic will follow Walgreen’s example and abandon the inversion portion of the deal, which would see Medtronic re-incorporate as an Irish entity subject to that country’s lower corporate tax rate.
