This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Dueling for Defibrillators

Updated from 1:34 p.m. EST

Boston Scientific (BSX - Get Report) served up a shocker Monday with an unsolicited offer for fellow medical-device maker Guidant (GDT), trumping a revised bid from rival Johnson & Johnson (JNJ - Get Report).

The cash and stock offer from Boston Scientific is worth $25 billion, or $72 a share. That's about $3 billion more than a recently revised offer by J&J for Indianapolis-based Guidant.

However, it's also about $4 a share less than the original cash and stock offer that J&J made last year . A series of recalls of Guidant products following the first bid prompted J&J to reduce its offer on Nov. 15. The revised J&J deal was worth $63.08 at the middle of last month and was valued at $63.43 as of Friday.

The boards of Guidant and J&J approved the revised offer, which still must be endorsed by the companies' shareholders. Guidant acknowledged receipt of the Boston Scientific bid, saying its board would consider it. J&J, based in New Brunswick, N.J., had no immediate comment.

The announcement by Boston Scientific -- whose market capitalization of $22.5 billion is about one-eighth the size of J&J's and about the same as Guidant's -- touched off furious trading among the three players.

Shares of Boston Scientific were erratic, falling as low as $25.51 and climbing as high as $27.73. The stock closed at $26.35, down 98 cents, or 3.6% on the day. Roughly 38 million shares traded, or more than eight times the average daily volume for the past three months.

Guidant jumped $6.16, or 10%, to $67.98, after going as high as $68.20, while J&J lost 16 cents to $61.05. Volume in both was heavy.

"We are surprised by this latest turn of events," says Joann Wuensch of Harris Nesbitt in a research note to clients. She retained her neutral rating on Boston Scientific. "Given Boston Scientific's market capitalization ... this appears to be a big nut to crack." She doesn't own shares, and her firm doesn't have an investment banking relationship.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs