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

To: richardred who wrote (978)	1/12/2006 12:22:39 AM
From: richardred	Read Replies (1) \| Respond to of 7243

The TO drama continues! The question what spoils will the looser feed on? Guidant Accepts Revised J&J Bid of $23.2B Wednesday January 11, 10:58 pm ET By Charles Wilson, Associated Press Writer Medical Device Maker Guidant Accepts Sweetened J&J Bid of $23.2 Billion in Cash and Stock INDIANAPOLIS (AP) -- Guidant Corp. accepted a sweetened offer of $23.2 billion in cash and stock late Wednesday from Johnson & Johnson, which has pursued the medical device maker for more than a year. J&J's latest offer topped its own former $21.5 billion bid, but fell short of a rival $25 billion bid from Boston Scientific Corp. In a statement, Boston Scientific said it plans further talks with Guidant and would "vigorously pursue this transaction to its completion." Guidant's board said it would recommend that shareholders vote in favor of the revised J&J deal during a scheduled Jan. 31 meeting, according to a joint statement from both companies. Both boards unanimously approved the revised J&J offer, the companies said. The latest Johnson & Johnson acquisition proposal -- its third -- calls for the company to pay $37.25 in cash and 0.493 shares of its common stock for each outstanding Guidant share. The transaction would have a per-share value of $68.06 based on Wednesday's market close. Boston Scientific's cash-and-stock offer is valued at $72 per share, including $36 in cash, giving Guidant shareholders slightly more cash with J&J's newest bid. Guidant Chairman and CEO James Cornelius said the J&J deal would provide certainty for Guidant's shareholders and employees. "Together with Johnson & Johnson, we will have the resources to continue to build upon the existing Guidant businesses in our pursuit of meaningful innovations to address cardiovascular disease," he said. In December 2004, J&J offered $25.4 billion for Guidant, but lowered the amount to $21.5 billion 11 months later because of Guidant's product recalls and regulatory investigations. Since June, Indianapolis-based Guidant has recalled or issued safety warnings about 88,000 heart defibrillators and almost 200,000 pacemakers. The company also faces numerous lawsuits. Last month, Guidant adjusted its fourth-quarter revenue estimates below Wall Street expectations after the recalls hurt the company's market share more than expected. Natick, Mass.-based Boston Scientific announced its unsolicited offer to buy Guidant in early December and officially presented the deal to Guidant's board Sunday. In its proposal, Boston Scientific said it would sell part of Guidant's business to Abbott Laboratories Inc. for more than $4 billion. Spokesmen for all three companies said they would have no additional comment Wednesday. J&J has argued that its larger size -- it posted $47 billion in 2004 revenue compared with Boston Scientific's $5.6 billion -- gives it greater resources to fix Guidant's problems and sustain long-term growth. William Weldon, J&J's chairman and CEO, said he had confidence in Guidant's employees and called them "technology innovators." "Together with Guidant, we have spent more than a year planning an integration that will create an extraordinary cardiovascular device business that can deliver better medical treatment sooner to millions of patients," Weldon said. "We strongly believe that our union with Guidant is the only one that can deliver on that promise, and create lasting value for shareholders of both companies." J&J, based in New Brunswick, N.J., is a close No. 2 behind Boston Scientific in the market for drug-coated stents -- metal-mesh devices that are coated with drugs to prevent scar tissue from creating new blockages after artery-clearing surgery. With new entrants expected into that field, Boston Scientific and J&J both see Guidant's business as a crucial element in the expanding $10 billion market for pacemakers and implantable defibrillators. That business has helped Boston Scientific more than double its earnings in 2004 and take a narrow lead in stents over J&J. But those profits, along with Boston Scientific's stock price, have since dwindled as a J&J stent has eroded some of Boston Scientific's leading position for its stent. Earlier this week, at least one major Guidant shareholder called Boston Scientific's offer superior. "We strongly urge Guidant's board to recognize the superiority of Boston Scientific's offer versus J&J's and, just as importantly, to ensure a level playing field should J&J increase its offer," Ivan Krsticevic, senior portfolio manager at Elliott Associates LP, wrote in a letter to Guidant's board this week. "Anything less than $71 per share from J&J should not be accepted, in our view." The New York hedge fund owns 3 million Guidant shares. AP Business Writers Ashley M. Heher in Indianapolis and Mark Jewell in Boston contributed to this story. biz.yahoo.com