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BFW 12/23 17:46 Stryker Said to Plan Smith & Nephew Takeover Bid Within Weeks
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Stryker Said to Plan Smith & Nephew Takeover Bid Within Weeks 2014-12-23 17:43:08.645 GMT
By Manuel Baigorri, David Welch and Dinesh Nair (Bloomberg) -- Stryker Corp. is planning a takeover offer for U.K. medical device maker Smith & Nephew Plc that could happen in the coming weeks, according to people with knowledge of the matter. The U.S. producer of surgical implants plans to offer a significant premium to Smith & Nephew’s current share price, with one of the people saying it could be about 30 percent. Shares in London-based Smith & Nephew have climbed 26 percent this year, valuing the company at about 9.7 billion pounds ($15 billion). The Kalamazoo, Michigan-based company is not planning a so- called tax inversion because of the limited tax benefits and political risk, said one of the people, who asked not to be identified because deliberations are private. The U.S. government is clamping down on inversions to stop companies from moving their addresses abroad through deals to cut taxes. The bid is still being finalized and the timing could change, said the people. There’s also a chance that Stryker decides against an offer, one of them said. Representatives for Stryker and Smith & Nephew declined to comment. Medical-device companies are looking to consolidate as hospitals and insurers demand better prices from suppliers to tame rising costs. Two large manufacturers of surgical products and medical supplies, Medtronic Inc. and Covidien Plc, are in the process of completing a merger that was announced in June. Last month, Stryker was discussing the financing of a deal and potential antitrust hurdles with advisers, people familiar with the matter said at the time.
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--With assistance from Sonja Elmquist in New York and Makiko Kitamura in London.
To contact the reporters on this story: Manuel Baigorri in London at +44-20-3525-4457 or mbaigorri@bloomberg.net; David Welch in New York at +1-248-455-2343 or dwelch12@bloomberg.net; Dinesh Nair in London at +44-20-3525-3212 or dnair5@bloomberg.net To contact the editors responsible for this story: Aaron Kirchfeld at +44-20-3525-8830 or akirchfeld@bloomberg.net Elizabeth Fournier