S+N statement: will start informal negotiations with Biomet

Smith & Nephew Says It’s Not in Talks to Be Bought or Make an Acquisition (Bloomberg)

Smith & Nephew’s Tantalizing Silence (WSJ)

S&N rejected $11 billion bid approach from J&J: report (UK Reuters)

S&N urged to reveal details of J&J bid (HealthInvestor)

Smith & Nephew Rebuffs JNJ Bid (HealthPointCapital)

Commentary from HealthPointCapital…   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.

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