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Healthcare

January 16, 2011 by staff 

Healthcare, (UKPA) – giant Johnson & Johnson Health is expected to launch a new assault on Smith & Nephew in a transaction that values the FTSE 100 to over £ 7 billion, it was reported.

The U.S. firm, means considering making a formal offer for the group following a principled approach was rejected last year, according to The Sunday Times.

A revised offer should be worth at least 800p a share, and the earlier approach of 750p a share, which is believed to have been rejected by the board of Smith on the grounds that it undervalued the company.

Smith shares rose to a peak of 735p all the time last week after rumors that it had rejected a bid approach from Johnson & Johnson, although they later fell back to 685p.

But the supply of new speculation by Johnson & Johnson may still be rejected, with Sebastian Jantet, ananlyst at Investec Securities, said a fair price for the company would be about 9 pounds per share, valuing the major manufacturer of implants Hip and knee at £ 8 billion.

Smith’s advice is also understood to have asked his advisers to begin preparing a defense against takeover news. Interest submission raises the possibility of another major British company goes to a rival overseas after selling last year for Cadbury’s U.S. firm Kraft Foods.

It is also believed that a new offer from Johnson & Johnson could spark a bidding war for Smith, with healthcare companies such as Biomet, Stryker and Zimmer should also enter the fray. Biomet is already rumored to be mulling a merger with Smith, even if it is not thought to have made a formal approach.

Hull-based Smith, who is over 150 years, left more than 1,000 products for operations in 32 countries, specializes in joint replacements, treatment of hard-to-heal wounds and products for use in operations endoscopy.

It is the world’s leading manufacturer of products for arthroscopy, in which the joints are made by a small incision. The group, which began life as a boutique pharmacy, and recorded sales of 3.8 billion (£ 2.5 billion) in 2009 and is the largest in the United Kingdom “medtech ‘specialist.

Johnson & Johnson is a division of medical devices and has a number of well-known household brands in the UK, including Listerine, Sudafed and Benecol. Smith & Nephew person could be contacted for comment on the report.

Copyright © 2011 The Press Association. All rights reserved.

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