Avecor rallies on new offer for company
By Kathy Fieweger
MINNEAPOLIS, Nov 24 (Reuters) - Shares of cardiovascular surgical products company Avecor Cardiovascular Inc. rose about 32 percent late Tuesday after it received an unsolicited buyout offer that topped an earlier deal, analysts said.
An unidentified major medical device manufacturer offered $13 each in cash or stock, Avecor said, topping a deal struck with
Medtronic Inc. (NYSE:MDT - news) in mid-July. That deal was worth $11.125 per share in Medtronic stock, or about $91 million.
A Medtronic spokeswoman said the Minneapolis-based company intended to go forward with the deal, and that it has a ''close working relationship'' with Avecor management.
Avecor shareholders already approved the deal Oct. 28 and it is now being reviewed by the Federal Trade Commission.
Analysts expressed surprise at the new offer.
''It's definitely out of the blue,'' Donaldson, Lufkin and Jenrette analyst Steve Halper said.
Merrill Lynch analyst Vivian Wohl said news of the new offer was great for Avecor shareholders, and that Medtronic may be willing to increase its offer as its stock price has appreciated in the last few months.
Avecor makes disposable medical devices for heart/lung bypass surgery and respiratory support. While the overall value of the deal was not huge in relation to mammoth Medtronic, Halper also said Medtronic has some room to negotiate.
Asked what would now happen to the Medtronic deal, spokesman Curt Swenson said, ''That remains open and we are talking to both Medtronic and the other firm.''
The Avecor board said it intended to consider its options, if any, in connection with the unsolicited offer.
Shares of Avecor were up 3-1/16 to 12-11/16 on the Nasdaq, while shares of Medtronic rose 1/2 to 69-3/4 on the New York Stock
Exchange.
The new unsolicited offer includes a provision under which the other party would lend Avecor the fee for terminating the Medtronic deal, Avecor said. |
