The Curious Case of PPCO

Late on Monday, Endo Pharmaceuticals (Nasdaq:ENDP) announced that it was acquiring its small partner Penwest Pharmaceuticals (Nasdaq:PPCO) for $5 per share, all of which is to be paid in cash. Normally, this would be a "no big deal" type of announcement - little deals happen all the time, and there would not be much significance to the deal beyond its impact on just the two companies. This deal is a bit more curious, though.

Somebody Seemed to Know Something
If you look at the behavior of Penwest's stock and options prior to the announcement of the deal, you too may find your eyebrows lifting a bit. The press release for the deal hit the wires at 3:30pm, but Penwest's stock started moving relatively early in the day on Monday, continuing a move that began roughly in the middle of the day on the preceding Friday. Keep in mind, this was a stock that tended to plateau for a few months at a time, so it was not as though big moves were normal.  


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