Smith & Nephew Shares Jump Again On Newspaper Takeover Report
January 17 2011 - 3:57AM
Dow Jones News
Shares in U.K.-based Smith & Nephew PLC (SN.LN) jumped 4% in
early business Monday after the Sunday Times newspaper reported
that U.S. pharmaceutical giant Johnson & Johnson (JNJ) is
mulling a fresh takeover approach for Europe's largest manufacturer
of replacement knees and hips.
The Sunday newspaper, which didn't identify its sources, said
Johnson & Johnson is understood to be weighing a formal offer
after a first tentative approach was rejected last year. A revised
bid is expected to be worth at least 800 pence a share, valuing the
company at just over GBP7 billion, it said, higher than the earlier
approach of 750 pence.
J&J could face competition from privately-owned U.S.
orthopedics group Biomet Inc., the newspaper said. Smith &
Nephew has begun preparing a defense, it added.
The latest report comes after Smith & Nephew took the
unusual step Friday of denying it was in any takeover talks after
market speculation pushed its shares to record highs.
In a statement issued through the London Stock Exchange Friday,
Smith & Nephew it "has a long-standing policy of not commenting
on press speculation, unless there is a regulatory obligation to do
so. However, exceptionally, Smith & Nephew wishes to clarify
that it is not engaged in any discussions which could lead to a
merger or a takeover."
Shares in the company nonetheless jumped early Monday after the
weekend report. At 0826 GMT, the stock was up 4.1% or 28 pence at
713p. One week ago, market speculation pushed Smith & Nephew's
share price to an all-time-high of 739 pence, but it fell after
Friday's denial by the company.
Smith & Nephew has been the subject of persistent takeover
speculation for years, with U.S. rivals in the market for
replacement hips and knees like Biomet, Medtronic, Inc. (MDT) and
Zimmer Holdings Inc. (ZMH) frequently touted as possible
suitors.
-By Sten Stovall, Dow Jones Newswires; +44 207 842 9292;
sten.stovall@dowjones.com
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