Rumors of a potential takeover caused shares of VWR Corp. (NASDAQ: VWR), a leading provider of laboratory products, to jump 19% as of 3:55 p.m. EDT on Wednesday.
The Wall Street Journal reported today that a private equity firm called New Mountain Capital is currently in late-stage talks to buy VWR Corp. in a deal that could be "valued at nearly $5 billion."
If true, then VWR's shareholders could bank a generous premium. For perspective, VWR's market cap as of the close of trading on May 2 was about $3.7 billion.
The article also stated that a deal could be made public as soon as this week. The excitement over the potential of a takeover announcement sent VMR shares higher.
Without more information to go on, it is hard to know what to make of this report. After all, within the last few months alone, investors have seen companies like Flexion Therapeutics (FLXN) soar based on merger and acquisition rumors and then come crashing back to earth after a deal failed to materialize. On the flip side, shares of Cynosure jumped after an article suggested that the company was looking to sell itself, and then less than a month later, it did indeed accept a buyout offer.
It is still anyone's guess as to whether this article has any validity. What is certain is that potential shareholders should keep away from the company's stock unless they believe that it will be a good investment based on financial statements and future prospects.