Boston Scientific delays Guidant deal close
MAR. 1 8:40 P.M. ET Boston Scientific Corp. said Wednesday its $27 billion acquisition of medical device maker Guidant Corp. will be delayed about a week, which would cost the company about $4.5 million per day in interest payments.
Boston Scientific had sought to finish the deal by the end of March. But in a regulatory filing, the company said it now expects its Guidant acquisition "to occur during the week of April 3, 2006."
The delay will trigger interest payments that Boston Scientific has agreed to pay Guidant shareholders if the deal wasn't concluded by a self-imposed March 31 deadline.
Boston Scientific spokesman Paul Donovan declined to discuss a specific reason for the delay, which was disclosed in a brief mention in its 144-page annual filing.
Boston Scientific had stuck by its initial end-of-March goal since late January, when it won a pricey bidding war with Johnson & Johnson to buy Guidant, based in Indianapolis.
The deal requires approval from shareholders of both companies, as well as regulatory clearances in the United States and Europe. No shareholder votes have been scheduled, but Donovan said dates in late March for those would be set "shortly."
Boston Scientific's $80-per-share offer requires the company to pay Guidant shareholders interest at a rate equaling 6 percent annually for each day after March 31 that the deal hasn't closed. That's about 1.32 cents per day for each of Guidant's 338.9 million outstanding shares.
At that interest rate, Boston Scientific would have to pay out an extra $4.47 million for each day, or about $31.3 million a week.
The interest pledge is one of the enticements that Natick-based Boston Scientific offered in response to J&J's bidding war argument that its offer provided a speedier route to approval.
Combined, the companies will manufacture stents, defibrillators, pacemakers and an array of other medical devices.
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