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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Boston Scientific Gets Guidant

Updated from 7:18 a.m. EST

The hard-fought battle for Guidant (GDT) looked over Wednesday with Boston Scientific (BSX) emerging victorious.

Guidant, the Indianapolis-based medical device maker, agreed to be acquired by its Massachusetts suitor after Johnson & Johnson (JNJ) let pass a midnight deadline to sweeten its takeover offer.

Boston Scientific's plan to buy Guidant for $80 a share represents a price that, on a split-adjusted basis, the company's stock never reached during its 11-year run in the public markets. Eli Lilly (LLY), Guidant's former parent, first offered shares in the company in December 1994.

Any investors who have been holding Guidant's common since then are getting one rich payoff: Adjusted for stocks splits and dividends, Guidant closed at $3.55 a share on Dec. 14, 1994, translating to a profit of more than 2200% for those who were there at the beginning.

While analysts say J&J could have easily outbid Boston Scientific, the New Jersey health-care giant opted to quit the fight. One obvious reason is that for J&J to continue, it would have had to lift its bid above the original $76-a-share offer made in December 2004, and that never seemed likely.

After Guidant recalled around 100,000 heart devices last year, J&J revised its initial price lower by about $13, saying the pacemaker seller was worth closer to $63 a share. However, J&J did eventually raise its takeover price two times after Boston Scientific entered the fray, ultimately stopping at $71 a share, or $24 billion.

In the end, trying to trump Boston again "would not have been in the best interest of its shareholders," J&J said in a press release.

As a result, Guidant terminated its agreement to be acquired by J&J and canceled a previously planned meeting at which shareholders were to vote on the deal. Instead, Guidant will be acquired by Boston Scientific for what amounts to $27 billion, an aggressive offer that has led at least one analyst to question the company's strategy.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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