TheChek News Flow

Stryker Corporation’s putative plans for a takeover of the listed UK-based medical devices manufacturer Smith & Nephew could be opposed by the grandchildren of Stryker’s founder, The Times reported. The newspaper quoted a market source who said that although the family of founder Homer Stryker might support an offer for Smith & Nephew, they would, should the deal be structured as a tax inversion, be subject to significant tax on capital gains.

Stryker, a listed Kalamazoo, Michigan-based medical devices supplier, announced in May that it had no plans to launch a bid for Smith & Nephew. The announcement followed news that Stryker had been seeking finance for an offer for its UK-based rival.

The Stryker family members hold about 20% of the company’s shares, with the largest family shareholders Ronda Stryker and siblings Pat and Jon, the article said.

The article noted talk prior to Stryker’s announcement in May that the group was planning to structure a deal as a tax inversion. Such a deal would involve incorporating the enlarged group outside of the US so as to avail itself of lower corporation tax rates, the item noted.

The report noted growing speculation that Stryker is now working on an offer for Smith & Nephew. Takeover Panel rules have prohibited Stryker from contacting Smith & Nephew for a six month period following its announcement in May. That period expires on Friday, 28 November, but the panel could extend the standstill period by up to six months if it rules that Stryker has broken the original agreement, the newspaper said.

Stryker refused to comment, according to the report.

Smith & Nephew’s market capitalisation stood at GBP 9.88bn (EUR 12.47bn) at the close of trading on the London Stock Exchange yesterday.

The Times