Shares of Bausch & Lomb surged more than 10% on Monday amid market chatter that the eye-care products maker could be taken private in a leveraged buyout, traders said.
Bausch & Lomb , which last year made a worldwide recall of a popular contact lens solution, could not be immediately reached for comment. Bausch & Lomb has a market capitalization of about $3 billion.
"The options and stock of Bausch & Lomb are very active and both are trading up on renewed speculation that the company could be taken private," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.
Shares of Bausch & Lomb hit a high of $60.86 around midday. The market chatter also prompted a spike in bullish stock-options volume as many investors positioned for more strength in the stock, traders said.
During the first half of the trading session, 23,602 calls and 2,570 puts traded, far outpacing normal volume of 1,495 contracts.
"Looking at the quick spike in the stock and the direct reaction in the credit market, the expectation is for an LBO (leveraged buyout)," said one arbitrageur. "But there's a new LBO rumor every day."