McKesson (NYSE:MCK) Ready to Defend US Oncology Acquisition Attempt

The attempt to acquire US Oncology Holdings Inc. by McKesson for $560 million has been put on hold by the Supreme Court of the State of New York in response to a case brought against it by the Cancer Clinics of Excellence, a network of oncology practices.

The Cancer Clinics of Excellence claims the deal is a breach of an agreement between them and McKesson.

Barclays (NYSE:BCS) said, "From our discussions with the company, McKesson believes that the order may have been granted hastily (our words) and plans to appeal the order in the next few days. MCK continues to expect to close on the USO acquisition according to its original 12/31/10 date noted in its merger agreement. We also highlight that based on our discussions with the company, while either party could walk away from the merger (with no break-up fee in our understanding), the company does not anticipate that occurring and intends to continue with the acquisition. Should closing be delayed, MCK intends to defend its position at the January 10th hearing."

Barclays maintains an "Overweight" on McKesson, which last closed at $70.86, down $0.11, or 0.15 percent. Barclays has a price target on them of $76.