Computer Sciences Corp. (NYSE: CSC) -- September $57.5 calls active on renewed buyout chatter. CSC is recently up $1.41 to $55.78 on renewed and unconfirmed buyout chatter. CSC is frequently rumored to be sold to IBM (NYSE: IBM), Lockheed Martin Corp. (NYSE: LMT), Hewlett Packard Co. (NYSE: HPQ), United Technologies Corp. (NYSE: UTX) or private equity after Apollo Management's bid for CSC failed in the spring of 2006. CSC announced the restatement of its fiscal 2007 annual report on 9/10. CSC September $57.5 calls have traded 34 times on transaction volume of 1,639 contracts, below its open interest of 2,020. CSC October option implied volatility of 35 is above its 26-week average of 27 according to Track Data, suggesting larger price fluctuations.
Sepracor Inc. (NASDAQ: SEPR) -- out of money calls active on unconfirmed Johnson & Johnson (NYSE: JNJ) buyout chatter. SEPR markets Lunesta, a prescription sleep aid, and Xopenex, a treatment to prevent bronchospasm. SEPR is recently up $0.35 to $28.86 on unconfirmed chatter of JNJ buyout interest. SEPR has a market cap of $3 billion. SEPR reported 2006 annual revenue of $1.1 billion. SEPR call option volume of 7,007 contracts compares to put volume of 227 contracts. SEPR September 30 straddle is trading at $1.65. SEPR October option implied volatility of 43 is near its 26-week average of 40 according to Track Data, suggesting slightly larger price fluctuations.
Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
