BY LAUREN UZDIENSKI, JANUARY 10, 2011
Smith & Nephew has rejected a $10.9 billion bid from Johnson & Johnson to acquire the company, according to reports out late this weekend. Smith & Nephew turned down the offer before Christmas, saying it undervalued the company. The stock price has increased about 19% over the past three months, driven by takeover rumors.
Some outlets have speculated that the company could face investor backlash over the rebuff, which represented a 15% premium over last Friday’s close and about a 2.8x revenue multiple. Smith & Nephew has long been seen as a prime takeover candidate, with Biomet recently identified as a potential acquirer, though merging Smith & Nephew with a large strategic (JNJ, Zimmer, Stryker) could raise anti-trust concerns. A UK analyst noted that Smith & Nephew may have to divest some of its assets before a deal with JNJ could close.
So far, none of the parties involved have commented publicly on a potential transaction. Smith & Nephew’s U.S.-listed shares rose to a 52-week high of $56.80 today, though those gains have slowed to about a 7% premium to Friday’s close.
Read the full article at: http://www.healthpointcapital.com/research/2011/01/10/smith_nephew_rebuffs_jnj_bid/