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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (960)	1/8/2006 6:33:51 PM
From: richardred	Read Replies (1) \| Respond to of 7243

Boston Scientific makes formal bid for Guidant Sunday January 8, 6:26 pm ET By Debra Sherman and Jessica Hall CHICAGO/PHILADELPHIA (Reuters) - Boston Scientific Corp. on Sunday formalized its $25 billion cash and stock offer to acquire Guidant Corp. (NYSE:GDT - News) in a move to woo the medical-device maker away from its existing merger partner, Johnson & Johnson (NYSE:JNJ - News). The purchase of Guidant would give Boston Scientific (NYSE:BSX - News) access to the $10 billion market for pacemakers and defibrillators, devices that help regulate heart beats and the main drivers in J&J's bid for Guidant. Boston Scientific said its definitive offer has the same price tag as a preliminary proposal it made last month. The new proposal, however, includes a protection against a fluctuation in Boston Scientific's stock price. "Guidant's board will probably take it's sweet time with the offer and if the board endorses it, it'll be the death knell for J&J's offer," said WBB Securities analyst Steve Brozak. Boston Scientific also forged a side deal to sell two Guidant units to Abbott Laboratories Inc. (NYSE:ABT - News) for $4.3 billion to help ease regulatory review of the deal. The sale of those units is conditional on Boston Scientific completing the purchase of Guidant. Under the agreement, Abbott would pay $3.8 billion upfront, plus two installments of $250 million each upon regulatory approval of certain products. Boston Scientific, based on Natick, Massachusetts, said its bid represents a 12 percent premium over the value of J&J's $22.3 billion agreement to buy Guidant. In November, J&J cut the value of its takeover offer following safety concerns and litigation over Guidant's heart products. Brozak said he expects Boston Scientific's bid to win. "I don't see how it's practical for J&J to come back now and raise their offer because they've said repeatedly that their last (reduced) offer represents full value. If they paid more and something went wrong, how would (J&J's) management rationalize that?" Brozak said. Boston Scientific, which makes cardiovascular devices and products used in oncology and urology, set a January 19 deadline for Guidant to respond to the definitive offer. Guidant, based in Indianapolis, and health-care conglomerate J&J, based in New Brunswick, New Jersey, could not be immediately reached for comment. Guidant's shareholders are currently scheduled to vote on the J&J offer on January 31. 'WE CAN MANAGE IT' Boston Scientific said it sees Guidant's product and legal problems as manageable. "The foremost thing here is that the long-term value of Guidant's business is very much in tact. We have a realistic view of them and these sorts of problems are not uncommon in this field," Boston Scientific's chief operating officer, Paul LaViolette, said in a telephone interview. "We've looked at the litigation very carefully. It's safe to say we can manage it," LaViolette said. When Boston Scientific made its unsolicited offer for Guidant, it said it expected the deal to benefit its cash earnings in 2008. However, after reviewing Guidant's business more closely, Boston Scientific's Chief Financial Officer Larry Best said in a telephone interview that it could take an additional 12 to 18 months for the deal to boost earnings. Boston Scientific said it expects adjusted earnings to be in the range of $1.50 a share to $1.66 a share in 2007, and in the range of $1.98 a share to $2.18 a share in 2008. In 2007, the first full year of the combined operations, Boston Scientific expects $10 billion in pro forma sales, ramping up to $16 billion in sales in 2011. biz.yahoo.com

To: richardred who wrote (960)	1/8/2006 6:37:33 PM
From: richardred	Read Replies (1) \| Respond to of 7243

Johnson & Johnson Reaffirms Commitment to Guidant Acquisition Sunday January 8, 6:09 pm ET NEW BRUNSWICK, N.J., Jan. 8 /PRNewswire-FirstCall/ -- Johnson & Johnson reaffirmed today that it expects to consummate the acquisition of Guidant Corporation immediately following a favorable shareholder vote by Guidant shareholders on January 31. All other conditions to close have been satisfied. "We continue to believe that the agreed upon Johnson & Johnson deal represents a better offer for Guidant Corporation, its shareholders and its employees than the recently announced Boston Scientific proposal," said William C. Weldon, Johnson & Johnson chairman and chief executive officer. "Johnson & Johnson has the capacity to invest in Guidant's future. We intend to dedicate the resources necessary to enable Guidant to achieve a full and complete recovery in the cardiac rhythm management market, and to achieve and sustain leadership in interventional cardiology." "Guidant shareholders will find the certainty and imminence of our transaction compelling," he continued. Johnson & Johnson has secured Federal Trade Commission, European Commission and other regulatory bodies' clearance of the acquisition and is satisfied that no other issues such as rights to intellectual property will impede the close of the Johnson & Johnson/Guidant merger. Weldon continued: "In becoming shareholders of Johnson & Johnson through the exchange of Guidant stock, Guidant shareholders would join a group of investors who have seen our company achieve over 70 consecutive years of sales growth, more than 20 years of increased earnings, and 43 consecutive years of dividend growth. With substantial investments in medical device research annually, coupled with equally strong research and development investment across our diverse business portfolio, we expect to continue a strong pattern of solid growth into the future." Johnson & Johnson is the world's most comprehensive and broadly based manufacturer of health care products, as well as a provider of related services, for the consumer, pharmaceutical, and medical devices and diagnostics markets. The more than 200 Johnson & Johnson operating companies employ approximately 115,000 men and women in 57 countries and sell products throughout the world. (This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Company's expectations and projections. Risks and uncertainties include general industry conditions and competition; economic conditions, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations; and trends toward health care cost containment. A further list and description of these risks, uncertainties and other factors can be found in Exhibit 99(b) of the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 2005. Copies of this Form 10-K are available online at www.sec.gov or on request from the Company. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.) Guidant Corporation and Johnson & Johnson have filed with the Securities and Exchange Commission (SEC) a definitive proxy statement/prospectus and other documents regarding the proposed merger between Guidant and Johnson & Johnson. Investors are urged to read the definitive proxy statement/prospectus and any other relevant documents filed with the SEC because they contain important information. The proxy statement/prospectus and other documents filed by Johnson & Johnson and Guidant with the SEC are available free of charge at the SEC's website, www.sec.gov, or by directing a request to Johnson & Johnson, One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attention: Investor Relations; or by directing a request to Guidant Corporation, 111 Monument Circle, #2900, Indianapolis, IN 46204-5129, Attention: Investor Relations. Guidant Corporation, its directors, and certain of its executive officers may be considered participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of Guidant and their ownership of Guidant stock is set forth in Guidant's most recent filing on Form 10-K. Investors may obtain additional information regarding the interests of such participants by reading the definitive proxy statement/prospectus. Source: Johnson & Johnson biz.yahoo.com