McKesson Still Wants Moore

Friday the 13th bore evil tidings for bride-to-be Moore Medical (AMEX:MMD), a surgical and pharmaceutical products specialist. Settle in for a tale of courtship, betrayal, and redemption.

On Jan. 20, Moore announced that it would be acquired by drug wholesaler McKesson (NYSE:MCK) for $12 a share. Unable to forever hold its peace, SJ Strategic Investments the very next day offered $15 a share. Today, when that deal fell through, Moore plunged 14%, illustrating the risk involved in betting on merger and acquisition (M&A) outcomes.

Business news has been dominated lately by Comcast's (NASDAQ:CMCSA) bid for Disney (NYSE:DIS). Disney, which failed to hold above $25 after breaching it in mid-January, now trades above both $27 and the value of Comcast's original all-stock offer. Obviously there is speculation that either Comcast will up its offer or that other bidders will emerge.

As a rule, once a solid offer is made there's a good chance merger partners will get together. Pfizer (NYSE:PFE), for example, offered a 54% premium for Esperion some months back -- and that merger recently closed.

The Comcast play for Disney is different, however, in that it is a hostile one. That is, Disney did not exactly encourage the overtures. But ask for it or not, it suddenly finds itself "in play," which is Wall Street jargon for "bleeding in shark-infested waters."

Disney shareholders must be dreaming of what could be. Might General Electric (NYSE:GE) get creative with other bidding partners so it could at least get its hands on the theme parks and other entertainment assets? Has Bill Gates directed Microsoft (NASDAQ:MSFT) to accumulate $52 billion in cash just so he could make a mostly cash offer? Sounds nutty, but it is dreams that will keep Disney's stock price inflated, at least for now. As always, inflation can turn to deflation if management manages to fend off all partners.

OK, right -- back to Moore Medical. Does the left-at-the-altar bride have a dandy-in-waiting? Yes! Turns out McKesson, true to its word, will indeed acquire all the outstanding stock at the original offer of $12. It's not $15, but it is a 54.4% premium over the stock's average close over the last 30 days.

It could have been a lot worse. As usual, a failed merger led to a fall in price. Fortunately, Moore has fallen, but it can get up.

W.D. Crotty is a shareholder in Disney and is watching the merger news with great interest. He and other investors actively discuss Disney on The Motley Fool's discussion boards. For a 30-day free trial to the discussion boards, click here.