December 21, 2010
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Martek Biosciences (Nasdaq: MATK ) saw its shares soar a staggering 35% in early Tuesday trading after Dutch vitamin giant Royal DSM NV said it will bid $1.09 billion for the company.
So what: Martek's leading position in the dietary supplements market will, according to Royal DSM CEO Feike Sijbesma, "add a new growth platform to our nutrition business." The buyout price represents a 35% premium to Martek's closing price on Monday, and with the transaction having already been recommended by its board of directors, Mr. Market feels pretty confident about the deal going through.
Now what: With the shares up near the buyout price, there's very little for Martek shareholders to do now but lighten up on the position and celebrate. While it might be tempting to hold out for a higher offer, the risk (even if it's small) that the deal will end up falling through isn't worth taking on. For the rest of us who weren't lucky enough to get in on today's buyout bonanza, one of Martek's biggest customers, Mead Johnson (NYSE: MJN ) , might be a decent way to invest in the dietary supplements space.
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